Updated: Aug 3
What game did you enjoy the most in your childhood? For some people, it was video games, playing on the streets, or sports, but for young Buffett, it was all about making money. Let's delve into the business mind of young Warren Buffett together!
The previous articles mentioned that Warren Buffett was born on August 30, 1930, a year marked by the U.S. stock market crash following the events of 1929. 1930 also became known as the year with the highest suicide rate in U.S. history.
During this challenging period, Buffett's father, Howard, was employed at a securities company that faced bankruptcy when Buffett was only one year old. To overcome this setback, Howard collaborated with a friend to establish a new company called Buffett-Ford Securities. Unfortunately, very few people had the means or courage to invest due to the prevailing poor market conditions, making it tough for the company to generate income in its early days.
Even though he faced financial challenges, Howard managed to take care of his family of five. He achieved this by living a very economical life, which significantly impacted young Buffett. The virtues of being thrifty and hardworking were instilled in Buffett by his father, and he carried them with him for the rest of his life.
Meanwhile, Buffett's mother, Leila, was a constant source of support, consistently encouraging her husband. She even made sacrifices by reducing her own food intake to ensure that Howard had enough to eat and remained strong for work. In an effort to save money, Leila decided to forgo attending church on Sundays, saving the 29 cents needed for transportation.
Though the family managed to keep a brave face, young Buffett couldn't escape noticing the anxiety in the eyes of many adults and the bleakness of those times, leaving a profound impact on his young and impressionable mind.
While most kids delighted in soda, young Buffett would collect discarded bottle caps and meticulously organize them, determined to ascertain which brand of soda sold the best! This early fascination with numbers revealed Buffett's strong interest in mathematics. Alongside his friends, he would jot down license plate numbers from high-rise buildings and engage in memory-testing games, such as recalling population figures for various cities when their names were mentioned. Even a toy metal coin exchanger captivated him, as he enjoyed dealing with loose change. All these activities became his beloved childhood games.
Yet, simply playing games couldn't satiate the young six-year-old Buffett. In 1936, when he started attending Rose Hill Elementary School in Omaha, the family's financial situation slightly improved, granting them a semblance of normalcy. It was at this time that Buffett showcased his entrepreneurial flair. He purchased a carton containing six bottles of Coca-Cola for 25 cents from his grandfather's grocery store and resold each bottle for 5 cents in his neighborhood, yielding a profit of 5 cents per carton.
His actions earned praise, even from his mother. In his annual shareholder report, Buffett once stated, "My experiences as a youngster eventually gave me a sound insight into the economics of retailing," which is something Berkshire Hathaway shareholders might have come across.
At the tender age of six, Buffett didn't stop there. He set up a stall selling chewing gum in front of his house and sold lemonade in bustling areas with higher foot traffic and greater spending power. But here's the remarkable part—this wasn't just for amusement. Young Buffett understood the toil his parents endured, and his compassionate heart desired to alleviate their burden. He wished to become wealthy so his parents wouldn't have to work so hard anymore!
At six years old, Buffett already demonstrated a keen business mindset. Let's continue to learn from him about business and sales thinking. Stay tuned for the next article, where we'll explore his further growth and transformation as he ages. Expect more fascinating stories next week!
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