Even as a small boy in Omaha, Nebraska, Warren Buffett wanted to be very, very rich. His first possession was a nickel-plated money changer that he proudly strapped to his belt. By age five he was selling Chiclets from a stand outside his house. At six he bought a six-pack of Coke for a quarter and hawked the sodas for a nickel apiece. He soon was charting stocks and made his first purchase--three shares of energy company Cities Service preferred stock--at age 11; they rewarded him with a $5 gain. Thus launched, Buffett vowed to become a millionaire by the time he was 30 and added, "If not, I'm going to jump off the tallest building in Omaha."
He never had to. His latest blockbuster deal came two weeks ago when Walt Disney Co. agreed to pay $19 billion to acquire Capital Cities/ABC. Buffett, whose Berkshire Hathaway holding company is the largest stockholder of Capital Cities/ABC, brokered the buyout and saw the 20 million shares that Berkshire had acquired for $345 million a decade ago surge to a value of $2.3 billion as a result of the deal. The merger raised the value of the investment by $400 million overnight.
Such gains have earned Buffett, 64, a personal fortune worth some $12 billion in Berkshire stock and made him the second-richest man in America after his friend Bill Gates, chairman of Microsoft. "In the annals of investing, Warren Buffett stands alone," observes Wall Street Journal columnist Roger Lowenstein, whose biography of Buffett will be published by Random House later this month. According to Lowenstein, an investor who had placed $10,000 with Buffett in 1956 would have holdings today worth about $95 million.
For Buffett, money has its own logic. He does not enjoy what it can buy. In fact, spending money interferes with its real purpose from the Buffett point of view--the sheer pleasure of accumulation. "He views money as basically a way of keeping score," says Lowenstein, "a way of measuring his success." While a boy, Buffett told a friend, "It's not that I want money. It's the fun of making money and watching it grow." As Lowenstein puts it, Buffett acquired while growing up "an overly reverent view of money's proper role, as if spending were a sort of sinfulness." Years later, on a tour of San Simeon, the William Randolph Hearst mansion in California, Buffett grew impatient with a guide and blurted out, "Don't tell us how he spent [his money]. Tell us how he made it."
Buffett's focus can make him come across as machinelike in his detachment. When a visitor to his office noted that Buffett had no stock terminal or computer, the billionaire replied that none was necessary: "I am a computer," he said. Buffett's son Peter recalls giving his father a birthday card and feeling dismayed when "he just sort of opened it and closed it--he read it that fast. I guess I was waiting for some response."
Buffett himself lives frugally. His Omaha house was bought for $31,500 in 1958; he drives a gray Lincoln Town Car without a chauffeur and does his own tax returns. He keeps a summer home at Laguna Beach, California, but shuns the water, preferring to stay inside and work. "It's a great [ocean] view," says Susan Buffett Greenberg, the eldest of Buffett's three children, "but he's never seen it."