— Ch. 1 · The Boy From Omaha —
Warren Buffett.
~7 min read · Ch. 1 of 7
Warren Buffett was born on the 30th of August 1930, in Omaha, Nebraska. He grew up as the second of three children and the only son of Congressman Howard Buffett and his wife Leila. His early years were filled with entrepreneurial spirit rather than typical childhood play. At age seven, he borrowed a book from the Omaha public library titled One Thousand Ways to Make $1000. This text sparked an interest that would define his entire life.
By high school, young Warren had already launched multiple small businesses. He delivered newspapers for the Washington Post, selling golf balls, stamps, and detailing cars for extra cash. In 1944, he filed his first income tax return claiming a $35 deduction for using his bicycle and watch on his paper route. The following year, he and a friend spent $25 to buy a used pinball machine. They placed it in a local barber shop and soon owned several machines across three different shops in Omaha. By 1947, they sold the business to a war veteran for $1,200.
His father took him to visit the New York Stock Exchange when he was just ten years old. At eleven, Buffett bought three shares of Cities Service Preferred stock for himself and three more for his sister Doris. By fifteen, he earned over $175 monthly delivering papers. He invested in a business owned by his father and purchased a 40-acre farm worked by a tenant farmer at age fourteen. That land cost him $1,200 of his savings. When he graduated from college, Buffett had amassed $9,800 in total savings.
The Textile Mill Turnaround
In 1962, Warren Buffett became a millionaire through the success of his investment partnerships. These entities held nearly $7.2 million, with more than $1,025,000 belonging directly to him. He merged these various partnerships into a single entity called Buffett Partnership Ltd. that year. This structure would serve as his primary investment vehicle throughout the decade.
Buffett began buying shares in Berkshire Hathaway, a textile manufacturing company, from its owner Seabury Stanton. The partnership started purchasing shares at $7.60 per share. By 1965, they paid $14.86 per share while the company held working capital of $19 per share. This calculation did not include the value of fixed assets like factories or equipment. At a board meeting, Buffett took control of Berkshire Hathaway and named Ken Chace as new president to run operations.
He closed the partnership to new money in 1966. Later claims stated that this textile business represented his worst trade. In 1985, the last mills forming the core business of Berkshire Hathaway were sold. The company then moved decisively into the insurance sector. Charlie Munger joined Buffett as vice-chairman in 1978, becoming a long-time business associate who shaped future strategy.