Warren Buffett was born in Omaha, Nebraska in 1930. He was the son of Howard Buffett, a member of congress and a successful stockbroker.
Young Warren had great skills with numbers and could memorize statistics easily. When he was eleven years old he began to mark the board at his father's brokerage. His first stock was purchased that same year: three shares of Cities Service Preferred at $38/share. The price plummeted to $27, but recovered to $40, where Warren sold and made $5. However, the stock later went to $200/share and Warren missed the boat, learning for the first time how important it is to be patient with stocks.
By the age of 14, Warren had two paper routes and saved enough money to buy 40 acres of farmland, which he leased to a tenant farmer. When he was studying at the University of Nebraska he read the bible of value investors, "The Intelligent Investor" by Benjamin Graham. The book advised people to ignore Wall Street trends and find stocks that traded below their real value.
Although Graham's technique required a lot of mathematics for analyzing balance sheets, Warren was well suited to it. Buffett graduated from the university, but was rejected from Harvard Business School. Eventually, he decided to move to New York and study with his mentor, Graham, at Columbia University. He graduated with a master's in economics and began working for Graham.
In 1957, Buffett returned to Omaha and started an investment partnership with local investors. A group of people gave Warren $25,000 each and, after putting in $100 of his own money, Warren appointed himself general partner and began trading stocks. Warren's goal was to beat the Dow Jones Industrial Average by 10%, but by 1969 his stocks had increased 29.5% in value, compared to 7.4% for the Dow.
In 1962, Warren had begun purchasing stock in a struggling Massachusetts textile mill named Berkshire Hathaway. Soon Warren found that he had a controlling stake in the company. Since the United States textile industry was ailing in the face of foreign competition, Warren began putting Berkshire's capital into other businesses. After making solid gains on insurance investments, the financial markets went into a short dip, but Warren was happy making a list of companies to invest in once it upturned.
Warren was married to a woman named Susan, who accompanied him on most of his business appearances and is one of Berkshire's largest shareholders. However, the couple stopped living together in 1977, with Warren living in Omaha and Susan in San Francisco. Even stranger, the couple met a woman named Astrid Menks, a Latvian waitress at a local restaurant who later moved in with Warren.
His children, despite being the children of one of the wealthiest people in the world, are treated in a businesslike manner. When his son wanted to purchase a farm, Warren purchased it and forced his son pay rent and taxes, much like a business partner. Once when his daughter needed $20 to get her car from the airport, Warren made her write him a check. Warren's penny pincher attitude is a trait that seems common among the wealthiest people.
Warren continued his wise investment practices until he had built billions of dollars in wealth. Today, Warren is the second wealthiest person on the planet, just below Bill Gates.