How warren buffett started investing

Warren Buffett started investing at the age of 11 before that he started selling items. In this blog, we will get to know Warren Buffet’s investment journey.

Table of Contents

Early days of Warren

Warran buffet when he was 6 years old he used to take chewing gum from his grandfather’s shop.

And he sells those chewing gum with some profit by going to every neighborhood household.
From this, he gets a profit of 2 cents from every chewing gum packet.

After that, he started making more profits when he started selling 5 coke for 25 cents.

He buys the 5 coke from 20 cents from his grandfather’s shop and he makes a profit of 5 cents by selling 5 cokes for 25 cents.

Buffett at a young age decided that by the age of 35 he have to earn 1 million dollars.

If he cannot earn 1 million dollars, he will jump from the tallest building of Omaha.
From a young age, Warran is very curious.

He used to perform different types of calculations.

Such that, he takes his friend to the road and writes the vehicle license plate number which is passing in the road.
He thinks that if in his neighborhood if there was any theft in someone’s house.
He will give police these number plates such that thieves will be caught easily.

Once he collects bottle caps, to check which brand of cold drink people drink more.

He came to know that maximum people prefer to drink coca-cola.
He also tried to know, the people who sing religious songs, live more than the people who sing normal songs.
After many calculations, he found that both group almost lives equally.
And for the people singing religious songs, they don’t get an extra advantage.

He first started his investment in the stock market when he was 11 years old.

That time warren has 120$ collected so far from selling coke and chewing gum.
Warren after doing extensive analysis.
He bought 3 shares of a company name “city service” for 114.75$.
The amount he earned from 6 to 11 years almost all the money he has invested in this company.
He also convinces his elder sister Dorrage to invest in this company’s shares.
After buying shares in few days the share values got down, and his elder sister while going to school always mock on him for this reason.
Sister says for you, my money was lost.
But after few days, the “city service” share got up.
Warren booked the profit and withdraw the money immediately.
Both Warren and his sister booked a profit of 5$.
After few days its share went 202$.

Warren 1st lesson from investing

That immediately the share price dint got the effect. Need to wait and have patience.

After that, he started selling newspapers.
He thought that from coke and chewing gum he has more profit on newspaper.
At the age of 14, he has accumulated 1000$.
Now Warren became good at calculation.
He feels shame when talking with girls, he thought that he should work on physical bodybuilding.
Warren has bought a dumble set, and he started using the dumble.
He found that his arms were not getting effect by exercise.
Warren believes in book reading, he used to spend most of this time reading books in Bensen Library in Omaha.
He used to read finance books.
He found a book where he found that his 1 million dollar dream can be achieved.
The book’s name is 1000 ways to make 1000 dollars.
The learning from this book is that how money is compounded.
He got an idea from the book if he buys a weighing machine and rents it.
He will start earning, and if he reinvests the profit again in the weighing machine. ie

If it takes 100 days to buy the first machine to the second weighing machine.
The third machine can be bought in 50 days.
And for the fourth machine 33 days.
So on, it was the calculation.

Instead of buying a weighing machine, He bought a ping ball machine with his friend Dainly.

Ping ball machine on rent

He installed the machine in the barbershop.
Told the barber that he will share the profit with him.
They started making money and they bought many more machines and rented them.
In school, people are thinking of them as cool.
After many days, Warren sold the ping ball machine business for 1200$.
He bought farmland of 40 acres in Nebraska for 1200$.
He made a deal with the farmer, if he works on this farmland, he will share the profit with him.
Warren is very happy because he doesn’t have to do physical work.
He doesn’t like to do physical work.
After 5 years he sold this farmland at double the price.
In these 5 years, he has earned much profit.
Warran doesn’t like to study in college.
When he came to his final year, he studied accounting which is his favorite subject.
He said that accounting is the language for business.
If anyone wants to learn business he should learn accounting subject.
At the age of 19, he has accumulated 9000$, if he compares with his friend he has more money.