Warren Buffett is one of the wealthiest and most respected businessmen on the planet, ranking as the sixth-richest person in the world. As such, he continues to be an inspiration to investors everywhere.
But as chairman and CEO of the famous Berkshire Hathaway company, SEC filings show that Buffett is making a modest $100,000 a year.
The infamous Warren Buffett salary has left many people with more questions than answers.
Keep reading to learn about the iconic billionaire and why his annual income is so low.
Warren Buffett Net Worth
As of November 2021, legendary investor Warren Buffett holds a net worth of 104 billion dollars, according to the Bloomberg Billionaire's Index.
The 90-year-old has managed to increase his net worth by more than sixteen billion this year alone. The 283,000 shares he holds in his company Berkshire Hathaway account for a large portion of his total fortune.
But how exactly did he get to be in the position he's in today?
Warren Edward Buffett was born in Omaha, Nebraska, in 1930. He took an early interest in the world of finance, vowing to be a millionaire by the age of 30.
Buffett was eleven years old when he purchased his first stock; three shares of "Cities Service Preferred." Shortly after that, he sold the stocks for a two-dollar profit per share.
Though happy at the time, Buffett soon learned that he could have sold his shares for a far higher profit had he waited. This lesson in patience would remain with Buffett throughout his career.
Buffett's strong work ethic remained steady throughout his adolescence. He took on various jobs and continued to reinvest his money.
Warren would go on to graduate from the University of Nebraska, receiving his Bachelor of Science degree. He then applied to Harvard's business school, only to be rejected. But, this didn't deter the determined young man.
He chose to attend Colombia University after learning that influential investor Benjamin Graham was teaching at the school. In 1951, Buffett graduated from Colombia with a Master's in Economics.
Buffett's first job post-college was as a stockbroker and securities analyst in Omaha.
In 1954, he went to work for Benjamin Graham's firm in New York, starting at $12,000 a year. By the time Graham's partnership closed, Buffett had a large sum saved from his investments.
His then $174k in savings roughly amounts to $1.5 million by today's standards. In 1956, he started "The Buffett Partnership." He'd opened seven partnerships in total just four years later.
By 1962, Buffett was officially a millionaire. This same year he acquired The Berkshire Hathaway company. What he considered at the time to be his worst acquisition ever is now one of the world's largest companies.
Warren Buffett is the CEO and chairman of Berkshire Hathaway. He purchased the struggling textile company believing proper leadership could turn business around.
However, the business continued to lose money until 1966, when Buffett shifted the companies trajectory completely.
Breaking away from textile endeavors, Buffett used Berkshire Hathaway as a holding company. A move that put the company on course to become the successful conglomerate it is today.
In 1967, Buffett began purchasing insurance companies. Success followed as he used the new source of cash flow to fund more acquisitions.
Today, Berkshire Hathaway manages the portfolios of over 1,000 companies, totalling more than $700 billion in assets.
Warren Buffett Salary
It may be hard to believe that Buffett's annual salary is only $100,000. When compared to the average salaries of other CEOs in the S&P 500, this amount is relatively modest.
For further comparison, the median annual salary of the average employee at Berkshire Hathaway was recently reported as $63,568. Meaning Mr. Buffett makes less than double that of his employees.
What may be more surprising is that Buffett himself is the one who recommends the amount of his pay and takes home no other forms of compensation or bonuses.
Buffett holds a firm belief that massive salaries encourage short-sightedness. And if you take a step back from the trees (salary) and look at the forest (net worth), you can see that there is a method to the madness.
In 1990, Buffett officially reached billionaire status after selling class A shares of Berkshire Hathaway. Since then, his name has remained among the top of "The World's Richest" lists.
Tenets of Success
Warren Buffett's business model is one of strategy. Staying steps ahead of the game has been the key to his success. To master the market, as Buffett did, strategic investment planning is a necessary tool.
Value and purpose shape everything Warren Buffett does. Even his breakfast choices are seen as investments, basing the amount he will spend that day on the state of the market.
Warren Buffett Portfolio
The man, fondly known as the "Oracle of Omaha," employs a value-based investing philosophy. He believes in investing in companies that show potential for solid earnings and long-term growth.
Buffett operates under a set of tenets that guide each of his investments. The twelve tenets fall into four categories:
- Market Valuation
Each stock is carefully analyzed by Buffett, ensuring they meet all of his criteria. Taking a look into his portfolio, you can see that his stocks reflect these values.
Warren Buffett Stocks
Warren Buffett holds a stake in dozens of companies, but just ten of those make up nearly 87% of his overall investment portfolio.
Shares of his company Berkshire Hathaway have managed to increase by an average of 20% per year over the last five decades, putting Buffett in a league of his own.
He is a leading expert in the industry, knowing the right moments to buy and sell based on his investment model.
Does Warren Buffett Deserve a Pay Raise?
The business mogul has been paid the same salary for the past 40 years. But, as CEO and chairman of the board, he could undoubtedly receive higher pay if he so desired.
Buffett has proven to be a modest man. He chooses to live well within his means and isn't worried about a pay raise.
In addition to being one of the most charitable billionaires in America, Buffet owns a modest-sized home. He is also known to enjoy a simple breakfast at McDonald's often.
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The Warren Buffett salary is a topic of intrigue, as he remains one of the world's longest-standing billionaires. Investors, new and old alike, desire to emulate the business mogul's success.
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