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Warren Buffett built his $150 billion fortune on frugality and disciplined investing.
According to the Times, the “Oracle of Omaha” still lives in the Omaha home he purchased in 1958 for $31,500. InvestopediaDrives modest cars and famously eats McDonald’s for breakfast, which costs no more than $3.17, according to cnbc. But even the world’s most famous penny-pincher has some areas where he can open his wallet wider. Below are Buffett’s four biggest extravagances.
Plus here are the top money mistakes Buffett warns about.
Buying a private jet that’s been called ‘inconvenient’
Buffett’s most famous pleasure came in 1986 when he purchased his first private jet for $850,000. Sentinel Aviation. The purchase was so ill-advised that they nicknamed the plane “The Indefensible”.
Buffett said in 1992, “For years, I argued passionately against corporate jets.” shareholder letter.
But Buffett soon discovered the value of private air travel. Just three years later, he upgraded a different used aircraft for $6.7 million in 1989 business insider. After realizing how much time it saved him, he even named the plane “The Indispensable”.
NetJets acquired for $725 million
Buffett’s love affair with private aviation didn’t stop there. In 1998, he purchased the entire fractional jet ownership company NetJets for $725 million in cash and stock, according to insurance newsnet.
The investment initially looked like a mistake, losing $711 million in its first 11 years. But the company eventually turned around and today NetJets operates more than 750 aircraft as the world’s largest private jet operator.
Charitable donations: $62B and counting
Buffett’s biggest extravagance isn’t for himself. According to GOBankingRates, he has given away $62 billion to charity and has pledged to donate 99% of his wealth before or after he dies.
In 2010, Buffett teamed up with Bill and Melinda Gates to create The Giving Pledge, which now has the signatures of over 200 wealthy individuals who have committed to donating the majority of their wealth.
investing in personal development
Although Buffett will not spend money on luxury cars or lavish mansions, he constantly spends money on books, education and personal development. He is famous for studying for hours every day.
Buffett said, “Invest in yourself as much as you can.” Gentleman’s Journal.