Warren Buffett: A Life and Legacy 1/13/26

Summary

Squawk Pod: Warren Buffett – A Life and Legacy

CNBC | January 14, 2026
Host: Becky Quick
Featured: Warren Buffett & Family

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Episode Overview

This special Squawk Pod episode, “Warren Buffett: A Life and Legacy,” is an in-depth two-hour audio documentary drawing from exclusive interviews with Warren Buffett and his three children – Susie, Howard, and Peter. The episode explores Buffett’s transition from Berkshire Hathaway CEO to chairman, his reflections on business philosophy, his evolving views on life and philanthropy, and the legacy he leaves not only in business but in his personal and familial approach to wealth and giving. The narrative weaves together Buffett’s stories, wisdom, life lessons, and notable advice for the next generation of leaders and investors.

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Key Discussions & Insights

1. The Transition at Berkshire Hathaway

(03:11–10:59)

• Buffett Announces Succession: Warren Buffett discusses stepping down as CEO of Berkshire Hathaway, passing the leadership torch to Greg Abel.
• On Greg Abel:
  • “Greg can do anything I can do and he can do it way, way better. But he didn't seem to mind waiting.” – Warren Buffett (03:13)
• Why Now? Age and inevitable physical changes were key reasons, not politics.
• Abel’s Authority: Board gave Abel full operational authority while Buffett remains chairman.
  • “He will have a lot of authority. But the fact that I'm sitting there means they think that, you know, it's okay with me and they'll get used to it.” – Buffett (05:57)
• Berkshire's Future: Company is designed to last 100 more years, aiming for adaptable, long-term growth.

2. Evolution and Wisdom

(17:29–24:42)

• Changes in Perspective:
  • Buffett credits “a series of people and events and thought” for shaping his wisdom beyond IQ.
  • Recognized his privileges: being “born in the United States... white... male.”
• Family Influence:
  • Father, Howard Buffett, instilled confidence and non-conformity.
    • “He quoted... Emerson... 'the power that's new within you is new in nature.'” – Buffett (24:42)
  • Gender roles and awareness grew over time; early experiences did not focus on the inequities his sisters faced.

3. Early Lessons: Risk, Failure, and Adaptation

(25:38–35:49)

• Pinball and Peanut Machine Story: Early business venture ended quickly over liability—lesson in responsibility and setbacks.
• Horse Racing vs. Stocks: Buffett’s gambling at the racetrack taught him about probabilities, compounded learning that investing in stocks offered structural advantages because “stocks pay dividends and compound over time.”
• Adapting in Business: Mistakes (e.g., with the Baltimore department store) became bonding experiences and sources of important lessons.

4. The People Who Shaped Buffett

(36:08–46:40)

• On Tom Murphy: Learned management and restraint.
  • “You can always tell somebody to go to hell tomorrow.” – Tom Murphy, recounted by Buffett (38:17)
  • Changed how Buffett approached conflict and negotiations; emphasized integrity, fairness, and long-term relationships.

5. Core Business Principles

(49:43–59:29)

• On Independent Directors: Skeptical of “independence” due to financial incentives.
  • “The people who are the independent directors are not independent. Usually the money is useful to them.” – Buffett (50:04)
  • Criticized the way compensation is ratcheted up and how board roles are “quite pleasant” but rarely challenge leadership.
• Berkshire’s Unique Approach: Focuses on attracting smart, aligned people, minimizing bureaucracy and conflicts of interest.
• Conservatism and Scale: Admits compounding gets harder at scale; prefers holding cash (“oxygen”) and will deploy aggressively for the right opportunity.

6. Philanthropy and Family Legacy

(62:13–97:17)

• Philanthropic Philosophy:
  • On giving: “If you're super rich, you should leave your kids enough so they can do anything, but not enough so they can do nothing.” (62:13, 96:47)
  • Buffett has pledged 99%+ of his fortune to philanthropy.
  • Focused on helping the less fortunate and empowering future generations, balancing timing of giving for maximum impact.
• Buffett Children’s Role:
  • Susie, Howard, and Peter will direct the remainder of his wealth posthumously, making all major decisions by consensus.
    • “The biggest challenge will be balancing the fact... he wants to see this money spent in 10 years... with how you lose control over Berkshire voting shares.” – Howard Buffett (71:53)
  • Family expects to make mistakes, values open communication, and rejects reality-TV succession drama tropes.

Family Insights and Stories

• On Growing Up Buffett (79:03–82:24):

  • Kids describe an ordinary, middle-class upbringing with lessons in earning, humility, and giving.
    • “We grew up in what I would call sort of a normal middle class, on the upper side of middle class. But we weren't living in the rich neighborhood.” – Susie Buffett (79:14)
  • Entertaining anecdotes: Warren’s slot machine strategy to reclaim allowances, misunderstandings about his job as “security analyst” (thought it meant checking burglar alarms!)

• Influence of Susan Buffett (82:25–88:59):

  • Strong charitable involvement, modeled giving, and grounded family values.
  • Warren credits late wife Susan and current wife Astrid for deepening his empathy, humility, and charity.

• On Mistakes in Philanthropy:

  • “Things sometimes don't work out the way you think they will ... We call those successful failures.” – Buffett children (90:56–91:05)
  • Emphasize importance of transparency and learning from failure even when stakes are high.

7. Buffett As Teacher and National Figure

(98:44–113:37)

• Calming Investors:

  • Known for appearing publicly to reassure markets during crises, e.g., the 2008 financial crisis.
  • “They weren't just worried, they were scared. They were scared stiff. That happens periodically in civilizations and it doesn't happen to me in terms of making business decisions.” – Buffett (99:05)

• Teaching Legacy:

  • Overcame fear of public speaking through Dale Carnegie. Taught for decades, valuing didactic connection with students.
    • “I loved it. You know, it appealed to my didactic style, and I liked my own ideas.” – Buffett (102:34)

• Practical Financial Advice:

  • On success: “It’s luck, a lot of it. If you choose the right parents, you’re rich when you come out.” (110:20)
  • Advocates for discipline: “There’s nothing magic. You just have to think a little and use a little discipline.” (112:49)

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Notable Quotes and Memorable Moments

• On Succession:
  • “Greg can do anything I can do and he can do it way, way better.” (03:13, Buffett)
• On Wisdom vs. IQ:
  • “On a wisdom test, I don't know exactly how you'd apply it, but I've seen more and more.” (18:00, Buffett)
• On Life and Luck:
  • “The easiest way to become rich is to pick the right womb to come from.” (110:20, Buffett)
• On Kindness as Success:
  • “...the one quality that I measure people by enormously... is kindness. It just doesn't cost anything. It is so easy, and you get it back with interest.” (116:58, Buffett)
• On Philanthropy:
  • “If you’re super rich, you should leave your kids enough so they can do anything, but not enough so they can do nothing.” (62:13, repeated at 96:47, Buffett)
• On Learning from Failure:
  • “We call those successful failures.” (91:05, Howard Buffett)
• On Money and Simplicity:
  • “I wouldn’t be happier anyplace else ... why haven’t you changed? I wouldn’t be happier any place else.” (113:54, Buffett)

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Timestamps for Key Segments

• Succession Plan + Greg Abel’s Leadership: 03:11–10:59
• Buffett’s Evolution & Influences: 17:29–24:42
• Early Business Lessons: 25:38–35:49
• Business Philosophy & Tom Murphy: 36:08–46:40
• Boards, Incentives, & Compensation: 49:43–59:29
• Philanthropy & Family Legacy Discussion: 62:13–97:17
• Buffett Kids on Giving and Upbringing: 79:03–82:24
• Teaching, Public Role, and Advice: 98:44–113:37
• Final Reflections on Kindness: 116:58–119:10

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Tone and Takeaway

The episode captures Buffett’s warm, candid, and often self-deprecating tone. There’s a focus on lifelong learning, humility, and resilience, made tangible by approachable stories from Buffett’s life and his children's perspectives. It is rich with practical wisdom—on business, money, mistakes, success, and the bigger meaning of legacy. Listeners are invited to reflect on the deeper purpose of wealth, leadership, and kindness, both in one’s own life and for society at large.

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For those wanting the “essence” without two hours of listening:
Warren Buffett’s lifelong philosophy is about patience, continuous learning, humility, true independence, and above all, kindness. As he steps back, his greatest wealth may be measured not in money, but in the values and methods he passes to the next generation—within his family and beyond.

Transcript

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[Warren Buffett]

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[Becky Quick]

Hi Squawk Pod listeners. This is Becky Quick. You're about to hear a special audio presentation of CNBC's Warren Buffett A Life and Legacy. This is about two hours of exclusive, never before heard interviews with the longtime leader of Berkshire Hathaway. Buffett reflects on his life and his business success and we're so pleased to bring it to you. Let us know what you think in the comments on Apple podcasts or wherever you listen. Warren Buffett built BERKSHIRE HATHAWAY Over 60 years, from a textile mill in Massachusetts to a trillion dollar conglomera. Buffett himself amassing a $150 billion fortune along the way, even while giving away more than $50 billion to philanthropy. Much has been said about Buffett's unassuming life in Omaha, Nebraska, his investment principles, and his beliefs in America. Tonight, through the course of a series of never before seen interviews with Warren Buffett over the last 14 years, we focus on what and who influenced America's greatest investor and how those people and moments change Buffett's views, philanthropy and life. We're also joined by his three children, Susie, Howie and Peter Buffett, who will face the daunting task of giving away the rest of their father's wealth. But first, we look at the future of Berkshire Hathaway and the man Buffett handpicked to succeed him as Chief Executive Officer. I'm Becky Quick. Thank you for joining us. For Warren Buffett, In His Own Words, A Life and Legacy it's only been about a week and a half since you announced to the world that you had decided that at the end of this year, you're going to be handing over the CEO title to Greg Abel 100%. What happened? What led you to that decision?

[Warren Buffett]

Well, it's been clear. Two things have been clear. One is Greg can do anything I can do and he can do it way, way better. But he didn't seem to mind waiting. But it was also true that a few years ago, and it wasn't more than a few, I just, I began to get older. Now, it wasn't a terrible thing and I've been happy, but my balance has changed and my voice has changed somewhat. And it just happens to people at different ages. And since I announced that and then at that article the other day, people just pouring in and of course, certain people want to compare it with former president. I mean, but it had nothing to do with politics. I mean, it just happens. And it happens to some people. At 75, very few people, very few males particularly get to 95 without beginning to grow older. And it doesn't mean the world falls apart or anything like that. It just means you can't do certain things that you could do before. And Greg is the person to be running Berkshire right now. And it was important that the board be 100% forum and that they just forgot about me and just decided whether he was the right guy. And of course, the day after I announced it at the annual meeting, we had a board meeting and. Whereas I planned to wait and give them a chance to ask because the big question is how big a deal should they be able to do, for example, without getting the board's approval? That's the one that they all got stuck on. But they were fine with that on the Sunday following the meeting on Saturday.

[Becky Quick]

Meaning they signed off on Greg's ability to.

[Warren Buffett]

Well, they basically did, yeah. And they just all ended up in agreement. And Steve Burke finally said, you know, we don't need sit around for three months in pirate or naval or anything on this. This is the right decision. And so they voted to do it.

[Becky Quick]

Meaning what? That Greg can do. I mean, that was always, that's always been one of the huge, powerful things of Berkshire, that if a company comes to has the cash to do a deal, it can promise on a handshake because of the authority you've always had with it. And it can make really, really big deals happen very quickly. Greg still has that same authority.

[Warren Buffett]

He will have a lot of authority. But the fact that I'm sitting there means they think that, you know, it's okay with me and they'll get used to it.

[Becky Quick]

Because you are still there as chairman and someone who controls 30% of the vote.

[Warren Buffett]

Well. And never going to sell a share.

[Susie Buffett]

Yeah.

[Warren Buffett]

I mean, how many CEOs in the country are willing. They'll never sell a share before their death and really never intend to sell a share for they put a dollar in their pocket from selling the shares. So that's an unusual asset for the company to have. And it's developed all kinds of communications with us. And, you know, I called Greg on one yesterday and on a deal that.

[Becky Quick]

Someone had brought to you.

[Warren Buffett]

It's a letter that probably. I'd probably be the only one that would get a letter like that, you know, in corporate America, because the person that wrote me just totally opened up on the whole situation and everything. Probably she wanted, wasn't going to deal with anybody else.

[Becky Quick]

I think there are still people who are wondering how this whole situation works. You'll still be the chairman, and what will you do? Will your life change? Will you still be coming into the.

[Warren Buffett]

Office and everything will be the same? I will come in. I won't be up there speaking at the annual meeting, but I'll be in the director section. Maybe you'll interview me at halftime or something of the sort. Who knows? But Greg will be the decider. He can't imagine how much more he can get accomplished in a week than I can or. I mean, he just. And at the same time, he's not a distorted individual. You know, I mean, he. He likes to play ice hockey with his kids and he lives what would look like a normal life. And my guess is that if the neighbors didn't know who he was, they wouldn't have any idea that, that. Well, on January 1st, he is going to be the decider on a company that. That employs close to 400,000 people. And it's got plans around to be around 50 or 100 years from now. And who knows what will happen, but it has a better chance, I think, of being here 100 years from now than any company I can think of.

[Becky Quick]

Berkshire is such a different company today than 60 years ago when you became the CEO. I just think about the conglomerate, the operations, the number of employees. As you mentioned, almost 400,000. That requires a different CEO than the CEO you were when you started out.

[Warren Buffett]

Well, it doesn't require much different, but if you think about it, this country was 4 million people with 500,000 slaves or something of them being slaves. And it was an ag country. And, and 61 years later, it was well on its way of being transformed into a conglomerate. And the United States is the biggest conglomerate in the world. And it was an Agriculture was 80%. Now it's 2%. And we're still a big ag company. But the country adjusted to the times as it went along, and it decided that there's a lot bigger future in being a very big conglomerate than there was in being a big ag company country. There's some big ag countries around the world, but they're not the United States. So it wasn't like they announced when they came out of the constitutional hall or whatever it was that, you know, we're creating this conglomerate. But that's what they did.

[Becky Quick]

So you think of Berkshire as being an evolving and constantly changing business. It moves with the times.

[Warren Buffett]

It'll always be moving somewhat, but it'll be mostly expanding. But occasionally there will be things that disappear. We will have companies that 50 or 100 years from now will not be viable in the economy of that world, but we'll have a whole lot more that developed over the years, and we can go over wherever the country goes, and we can go with capital. And Greg understands more businesses in a sense than I do. I understand pretty well the ones that came along while I was expanding Berkshire. But if you ask me whether I know much about the companies that are being formed today, the answer is no.

[Becky Quick]

There are people who will say, okay, well, we know that Greg is a great operator. He has proven that. But does he understand the insurance operations? Does he understand the equity portfolio? Does he understand capital allocation?

[Warren Buffett]

Well, if you understand business, you understand the equity portfolio. We buy businesses like we buy marketable stocks. We buy marketable stocks like we buy businesses. They are businesses. I mean, if you inherit a lot of money today, and the provisions were that that you lived in all your life and you had to buy three companies with the money, and the next month, you know, you think about the same things that you think about when you buy stocks. You think about what companies have futures and which ones have got some competitors that are going to, you know, going to try and strangle them and then will they be successful? And it goes on and on, but it's the exact same problem. You pick out the best business in Omaha, and you certainly wouldn't say, I want daily quote quotes on them, and I want a chart of their transactions that they've had within the company. Of course, those companies wouldn't make forecast to me or anything like that. I just try and pick out the three best businesses in Omaha, and we've had instead of Omaha, we've got the whole country and to some extent, a little bit beyond the country. And he knows how to do that. I know how to do it. He works way harder, more efficiently than I do. And he knows more about certain industries. It doesn't take a genius. It sure doesn't take any Greek symbols or anything like that to figure out what a business is worth. If Greg, if he quit high school like some of our managers have, he'd still be as smart as he is. I can't think of anything that been written teaches you more about how to buy a business than a couple of books I read, you know, 60 years ago. And Greg's operated more than I have, when you get right down to it. I mean, he's going over to England to run something. He went out, you know, he came to Omaha one time to run a business for a few years. And he knows there's no secret formula that only CEOs have or anything of the sort. So I'd rather have Greg handling my money than any of the top investment advisors or any of the top CEOs in the United States.

[Becky Quick]

That is a huge endorsement.

[Warren Buffett]

It is a huge endorsement, but it's an endorsement we've made. And I am going to have him handling the money. In effect, he knows business. Some people have it in business and some don't. Some have it in music and some don't. Some have it in various sports and others don't. You know, I don't understand the brain that well, and anybody does. Exactly. But some people have unbelievable talents. They can remember hands of BRIDGE they played 50 years ago and describe everybody else's hand and do that sort of thing. And others can sit down at a piano and start playing right from the word goal. You know, look at Ray Charles or anybody. It's unbelievable what different people can do. And I happen to have a guy that can run businesses. And if you can run businesses, you can value businesses. Unless you're nuts, you know, and listen to the wrong people.

[Becky Quick]

I want to go back to being on stage when you were about to surprise the world and Greg Abel, right, by telling them that he was going to be named the CEO come January 1st. Were you anxious about telling the world? Had you figured out what you were going to say? Why do it as a surprise like that?

[Warren Buffett]

I kind of like it. Tomorrow we're having a board meeting of Berkshire and we have 11 directors. Two of the directors who are my children, Howie and Susie, know of what I'm going to talk about there. The rest of Them this will come as news to. But I think it's. The time has arrived where Greg should become the chief executive officer of the company at year end. I've had a few surprises over the years that may not be done yet, but don't expect too many. But I had not written out any statement. I mean, why would I? I mean, I've still got a brain that can think somewhat about, you know, talking about something like simple thing as a schedule of why what I'm doing and why I'm doing it. And interestingly enough, it wasn't emotional. It isn't that I don't get emotional about some things, but. But there's nothing emotional about it at all. I mean, from the moment I bought it, I knew I wasn't going to run it into eternity or anything like that.

[Becky Quick]

Well, you did run it for 60 years.

[Warren Buffett]

I know. And everything I wanted to have happened has worked out. I mean, doesn't mean that everything we've done has worked out. But I couldn't imagine more fun than I've had running Berkshire and Charlie and I would have more fun out of the things that didn't work a lot of times than. I mean, if you played golf and every time you hit the ball it was a hole in one, it would be no interest whatsoever. But if Charlie hit a hole in one, I mean, it would be a miracle. And the ball would bounce off the tree and everything, which I would remind him of later on, but that was a thrill.

[Becky Quick]

Still ahead on Warren Buffett A Life and Legacy. What else do you think is stupid in business these days?

[Warren Buffett]

A lot.

[Becky Quick]

And hear from Buffett's kids.

[Susan Buffett]

And honestly, when I called him up and said, you know, I want to opt out, he said, I don't blame you.

[Howard Buffett]

Yeah, we'd say that to all of us.

[Susie Buffett]

He actually thinks it's kind of funny.

[Becky Quick]

That we have to do this.

[Warren Buffett]

Yeah.

[Becky Quick]

The reason that I really wanted to sit down with you was to talk about how your views have changed and evolved over time, because you've been remarkably consistent on so many things. But over the span of the time that I've known you, Even the last 20 years, you have evolved on thoughts when it comes to business, when it comes to philanthropy, when it comes to life. And that's true. I was hoping we could talk a little bit about how your views have evolved and who's influenced you over that period of time.

[Warren Buffett]

Well, I got influenced by a series of people and events and thought, and I'm not. I wouldn't score anywhere near as well, on an IQ test now, as before, anything but I think on a wisdom test, I don't know exactly how you'd apply it, but I've seen more and more. You know, I grew up in an extraordinarily Republican family, so I started out that way. I grew up in a very religious family. I started out that way. Now, over 94 years, all kinds of events have happened. Overwhelmingly good. I've had people I've worked for. I've worked for five people. Every one of them treated me better than I deserved to. They didn't pay me better than I deserved. I got 75 cents an hour. But I've had all kinds of reinforcement and being exposed to different kinds of people with different kinds of views, but also seeing a world that is so different in so many ways that you couldn't help but have your thoughts reformulated in some ways. And I've been unbelievably lucky and just lived in 94 to start with. But to be born in the United States and that's been. And be born white and be born male, and all those things became more impressed on me as I saw more of the world. You know, I did not give a lot of thought when I was 10 years old that my sisters were going to get the short end of the stick. But then I experienced it. I mean, everybody. The world was open to me, and it puts them in a special niche. You can't be born with that kind of knowledge. You can learn unbelievable amounts in those first five years, but you don't. You're really focused on your own development or 10 years, but after a while, you can start observing a little bit, too. And I changed my views on a lot of things over time, and I really do think that. But to some extent, with experience, you ought to get more wisdom than you started with. And you can't get it out of. Well, you can learn a lot of things out of a book, but you can't get. You really can't have experience. You can't have your heart broken by reading a book when you're three or four years old or having it read. You can't have the thrill of the exhilaration that comes with accomplishing something until you actually do it. So you do get molded by the years. And when you have 94 years and you have. You live in America and you have all kinds of interesting experiences and you generally keep your health. I mean, you won the lottery.

[Becky Quick]

Why don't we talk about some of those influences? Because you mentioned you grew up very Republican. You grew up very religious. That's largely because of your father, who.

[Warren Buffett]

Yeah, well, and my mother was religious, but she subordinated on an IQ test. She would have beaten my father, but it just wasn't in the cards that you did what your husband expected you to do in those days. And so her life was subordinated to my dad, which I didn't even think about that, of course, when I was five years old. But I would have thought about it a lot if I'd been a young female growing up. Then my sisters. One of my sisters is alive. One died a few years ago, but they did not have the same issue they've been for a couple hundred thousand years. You know, find me a country where it was better off, you were better off being a female than a male in terms of inheritance, in terms of ownership, in terms of employment, in terms of anything. And you could take 200 countries and you couldn't find a single one. Well, that wasn't something I dwelled on a lot at five years of age. But when you see that, you learn more about how people actually operate. I mean, you can watch. The 19th amendment was ratified in 1920. And yet your sisters are being told that Mary Young, while you've still got your looks, and I'm being told that the world is. Offers unlimited opportunities. Well, there's something wrong with that picture. But you don't figure that out at 10.

[Becky Quick]

Well, what did open your eyes to that?

[Warren Buffett]

Well, they open gradually, but they. And then sometimes there'd be an abrupt event that would sort of drive it home to me. And I think you just have to get out and live a little and live in different environments and then think about what you're seeing. And if you're. If you're lucky, don't quit thinking. Because if you're unlucky, you won't quit thinking. Well, it just struck me as very wrong to have two sisters that had the same IQ that I didn't. And, you know, I. I mean, if I'd been born female, I would not have had the same life I had, not remotely. If I'd been born black, I wouldn't have had the same. And I was lucky enough to be born in America. I mean, just imagine if I'd been born in all kinds of other places or if I'd, you know, a couple hundred thousand years to pick out a womb to come from. And if I. If I'd lived in practically any year, except in the last maybe 10 years before I was born, my life would have been so much Worse.

[Becky Quick]

You know, Warren, let's talk a little bit about your relationship with your father. Because he was the first most important person and most influential person in your life.

[Warren Buffett]

Definitely. Well, one way or another, either your mother or father or both will be the most important. You are the world. And in my case, my dad was formed me more than my mother did. And my dad had total faith in me. And. And I knew he had total faith in me, and that takes a long way. And he had faith in my sisters, but he did not have the same. Conveyed the same expectations to him. I don't think he thought about it because he would not have consciously done anything to hurt my sisters. I mean, they were teaching girls to do different things than boys and have different expectations.

[Becky Quick]

What expectations did your father have for you that he didn't have to?

[Warren Buffett]

He said that which was very important. He had no feeling that I should follow in his footsteps, period. You know, he says every one of us is different. He quoted, I think, Emerson on that, you know, or somebody. The fact that the power that's new within you is new in nature, which of course it is. And he just delivered that message to me. So I had no feeling that because he was in investment business, originally, politics later on, but I felt no obligation. And he never felt that. He was very devout in terms of. He spent a lot of time reading the Bible and teaching. And he just figured as long as I didn't do anything illegal, he would not have approved of that. The closest thing I came to was pinball machine business, but he approved of that.

[Becky Quick]

Finally, in 2012, we traveled with Warren Buffett to Washington, D.C. where his family had moved after his father was elected to Congress. There he told us about that infamous pinball machine incident.

[Warren Buffett]

The Woolworth was over on this side, and Frank's Barbershop. Now, Frank, after we put in the pinball machine, he kept insisting that we put in a peanut machine, which I had philosophical objections to, because you actually had to give people something in the peanut machine. But he said if we didn't put in the peanut machine, he would make us take out the pinball machine. So we bought a peanut machine for about $15 or so. And then I bought five pounds of Spanish peanuts for a dollar fifty. And we brought the machine out. There's one, you know, you stuck a penny and you move a little lever and some peanuts came out, Spanish peanuts. And we put the machine in Danley. And I drove to my house, which is only about 10 minutes, and when I got there, my mother saying, there's Some guy on the phone that's screaming for you in Italian. And I had no idea what was going on. So I pulled the phone and it's Frank. And he says, get back here immediately. And so we come right back. There's a customer of his. The guy is bleeding from the mouth. And what had happened. We bought this new machine. There was a little glass in the bottom of the bowl. So when the peanuts had come out the first time, there was a little glass got in it. So now our receipts were $0.01, and we had a liability suit. At that point, I just gave the machine to Frank and I said, frank, it's all yours. You don't owe us a penny. I got out of the peanut machine, but business. But he approved of that finally. Well, he actually approved that. Jesus. Figured that it was legal. I paid my tax on it and everything. So he always. He did not approve improper behavior. But he didn't put you. He didn't banish you or really do anything by just saying you can do better. That's a pretty good message to your kids.

[Becky Quick]

It is. And you followed in his footsteps in the financial business?

[Warren Buffett]

Well, he really. Yeah, but he wasn't interested. He wanted to go to the newspaper business, but his father paid for his education and actually told him where he thought he should take his first job. And in 1931, on his birthday, he went to the bank he worked for. And then it said, you know, go back home. We're closed. So he then started as a result of the. They went broke.

[Becky Quick]

Financial.

[Warren Buffett]

Yeah. Yeah. Four banks went broke there in a few days.

[Becky Quick]

The Great Depression, I should say.

[Warren Buffett]

So my dad, he needed something to do, and he didn't want to go in grocery business to my grandfather. So he started the stock. He sold investments, and I think he enjoyed it, but never fulfilled any part of what he. His inner self was not involved in that. I got more interested in the first day I was down in his office than he was.

[Becky Quick]

It has fulfilled you.

[Warren Buffett]

Oh, yeah. Everybody has different paths through life. And what you really want to do is end up doing something you do if you didn't need to do it for the money. I mean, if you really, you know, whatever it may be in terms of helping other people, in terms of whatever it may be, you really want to have a job where the fact you get a paycheck is incidental to what you're doing now, you still need to have a job in between. So you may go through a series of other jobs. But I've told my own kids, I mean, you know, just wait a little. Look for the job you'd take if you didn't need a job. And that's basically what my dad was telling me. And I found the answer when I was five. And it was just interesting to me. Way more interesting to me than it was to my dad. I mean, he kind of got a kick out of the fact that I actually enjoyed all these things.

[Becky Quick]

Well, your dad got elected to Congress. You went to Washington, right?

[Warren Buffett]

Well, I may have driven by it 30 years ago or so, but I haven't been in it since 1952 when my dad left Congress. Mrs. Wilcox, hi, I'm Warren Buffett. It's a real pleasure meeting you. Oh, thank you. Thank you.

[Becky Quick]

What year did your parents move in here?

[Warren Buffett]

We moved in in the summer of 1943. My dad first lived in Fredericksburg after he got elected. And he got elected in the fall of 42. We moved family back to this area. But my dad thought Washington was kind of a sin city, so he thought that the three children should not be raised in an area like Washington, D.C. so we lived in Fredericksburg. My dad had a little apartment up here. It's about 50 miles away. And that did not work out well. And then that summer, the family decided that we were all going to live together and it was going to be in Washington D.C. so my dad bought this house. I used to store my money there. I might find some that I left.

[Becky Quick]

And you were a big booster and helped him get elected. Every time he ran, you and your sisters as a family all went all in.

[Warren Buffett]

Yeah, my one of my surviving sister, Birdie. 91 now, but we talk about that every week. Well, I mean, you want to win? Sure. I mean, we'd campaign, we'd gone around to these, these county fairs and. And of course we had this one recording where we, Doris, Birdie and I sang America the Beautiful while my mother played it on this little organization we had at the house. And it's a 15 minute program. My dad introduced each one of us kids and he said, there's Doris, age 14. And she said something. And they said, and There's Warren, age 11 or 12, depending on what the date of it was. And my line was, just the second, Pop, I'm reading the sports section. And that was my only line which I delivered flawlessly, of course. And then at the end, my sister and I sang American the Beautiful. And that ran on. Wow. And there was just an outpouring from that. So they may have run it a bunch more times. And I'd Give a lot to have a copy of that. Unfortunately, I don't. Well, one of the first things I did when my dad got elected, I said, I want to take out every book they have on horse handicapping from the Library of Congress because that's the only thing I knew about Congress was that they had this Library of Congress that was famous for everything. My dad said, don't you think it's a little. They might think it's a little peculiar for a freshman congressman to make that his first request at the Library of Congress. And I said, pop, I said, you're going to be running for election in two years. I mean, I will look for you if you're a kid. So I ended up with hundreds of books on horse handicapping.

[Becky Quick]

Really? That's what you took out of that?

[Warren Buffett]

Well, that was first. More books on stocks came later. But I was particularly interested in horse handicannicapping at that time. And what I would do is I got all these books and I was either a speed handicapper or a class handicapper. Speed handicapper looks at the horses times that they've achieved and the class handicapper looks to their breeding. And I was making a major decision at age 11 or 12 to be either a class handicapper. Speed handicapper.

[Becky Quick]

Handicap speed. You chose speed handicapper.

[Warren Buffett]

I was a speed handicapper, yeah. And then there was a place on North Clark street in Chicago that would sell you a month of old racing forms which were daily and they had every, they covered all the major tracks. And so I would, I would buy these month old things for practically nothing. And then I would test my handicapping each day, doing 40 races, maybe eight races at five tracks and test out whether I could, my knowledge was superior enough to beat, unfortunately, which were very large expenses like maybe 18% or something of the sort. And that's a big, big handle to beat. And of course in stocks you've got a positive something. They're earning money, but all you're doing at racetrack is trying to beat everybody else that's making judgments about what horse is going to finish first. And so there is nothing being created, there's just a take. So I went from the, I graduated finally from the operation that had an 18% handle against it to something that's had a very dramatic positive expectancy in stocks. And what Dow Jones average was 100, it crossed 100 on the day I bought my first stock and now it's at 42,000 or whatever. And so pay dividends the whole time. You can't find a horse that does that.

[Becky Quick]

But what pushed you out of horses into stocks? Was there a moment that turned you soured you?

[Warren Buffett]

I, I like both of them for a while, but there was one time when I went to Charleston, West Virginia and I had a couple of horses in mind, but I lost some money on the first race and then I did the dumbest thing you can imagine, which I just kept betting every race. And when I went home I was $50 poorer, which was all I'd taken with me. And that equip was equivalent to delivering 5,000 papers. I was delivering papers to earn money. I made about a penny each. And so I had to deliver 5,000 papers for doing something very stupid. And I went to the Howard Johnson's and I had a couple of dollars left, bought myself a fancy meal and just sat there and thought about it and thought about it in the trade and that was the end of orchard issue.

[Becky Quick]

Up next, did you used to tell people to go to hell a lot before that?

[Warren Buffett]

Well, I certainly did it more before I heard that advice than afterwards. It's not something you could shake immediately, but.

[Becky Quick]

I would say in the beginning you probably were a little more hard pressed to drive for the best deal possible.

[Warren Buffett]

My behavior on in business has changed over time.

[Becky Quick]

How so?

[Warren Buffett]

But that is a product enormously of bringing around the right kind of people. I mean, when you get to be. And I would pick out number one, a student in effect, or a partner of Thomas Murphy. If you don't learn something from that, you don't want to learn anything by being a partner of Bernie Madoff's, you know, and I've been so, so lucky, starting with working for, well, working for my dad, but working for Graham and all these people. I've never had a bad boss. And that's pretty lucky when you're 94, I mean. And I've had the best of them. I just wish I'd met some of them a lot earlier, you know, but one way or another, fortunately most of them lived a long time. So even though I met them at age 40 or something, I still had long experiences with, you know, people like Charlie Munger, number one, but Tom Murphy in a different way, but similar ways.

[Becky Quick]

What did you learn from Tom Murphy?

[Warren Buffett]

Oh, I learned how to behave. And he was probably the best business manager I've ever run into. But he didn't do it by, you know, whipping people to death for eight hours or turning it into 12 hour days or, you know, he brought out the best in everybody, but he wasn't a pollyanna. And if you'd done nothing but study him, you wouldn't have had to study anybody else.

[Becky Quick]

What's just a lesson you took away maybe the first time you sat down and had lunch with him or something. How did things go? When did you realize that he was somebody special?

[Warren Buffett]

The first time I break. I did have lunch with him when I was about 40, and I remember a couple things from that, but it was just a stream. It was watching him, too. I mean, he wasn't behaving inconsistently with what he said. But, you know, he told me, he says, you can always tell somebody to go to hell tomorrow. I mean, just think of how much trouble that keeps you out of because you haven't lost the option. So don't feel that you've only got 15 seconds to say it or 30 seconds.

[Becky Quick]

Did you used to tell people to go to hell a lot more before that?

[Warren Buffett]

Well, I certainly did it more before I heard that advice and afterwards. It's not something you could shake immediately, but I watched it work with Tom Murphy. I don't know anybody that had more good interactions, whether it was with buying businesses, whether it was operating businesses, whether it was dealing with any person's problems that came to him. I mean, it was just built into his behavior in every way. And there's a few letters or things I haven't written because I remember that advice. And, you know, it's very human to want to tell somebody to go to hell. Yeah, well, everybody. I mean. And when have you ever gained. I mean, the only thing is you may have felt a little bit better.

[Becky Quick]

It can be really satisfying.

[Warren Buffett]

Yeah, it is satisfying, but do it with a mirror or something. But you can have a lot of satisfaction the next day if you just keep saying to yourself, you know, you haven't given up. And just watching him, he taught me more about human behavior. But it was business oriented to a great degree. But it was beyond that. It was way beyond that. And you find me anybody that dealt with him, worked for him, you know, girlfriends he broke up with, you know, 60 years ago or 70 years ago. I mean, anybody that has a bad word to say about him, but he wasn't a Pollyanna. He made all kinds of big decisions. Every lesson I learned from him was a good lesson. Doesn't mean I apply them all of it. But, you know, and you're just lucky when you meet somebody like that in life. And then it's like Charlie, whom I met, you know, when I was 29, Charlie and I had more fun on things that failed and succeeded. I mean we just. It just struggles. Humorous that a couple of guys like ourselves should make a big mistake. There's just a connection. And my friends have all been quite intelligent, but they didn't have to have. If they get up to 180 or 200 IQ, the curve starts bending the other way sometimes. But they were all intelligent, but they also didn't all think they had to outsmart the other person. Murphy never made a deal where he tried to extract the last penny. He always made good deals. And there's a number that he didn't make that he wished he'd make, you know, but he did all kinds of things for other people, especially me.

[Becky Quick]

You said that you and Charlie learned more from or had more fun from the things that maybe you made mistakes on what's a Problem Project the two of you did together. A deal the two of you did together, where things went wrong and then you had a good time as you were trying to figure out how to extract yourselves from it or pay back the people.

[Warren Buffett]

All kinds of things. Well, we bought a department store in 1965 or 6. 1966, in Baltimore.

[Becky Quick]

With Sandy Gottesman?

[Warren Buffett]

Yeah, with Sandy Gottesman. And it was his. His wife's uncle that owned the business. I mean in Baltimore. And Sandy went in it and his firm took 10%. Charlie's firm took 10% and my firm took 80%. Because we were larger in those days than those guys, although we weren't very large. And Sandy and Charlie did not know each other ahead of time, but they both knew me. And anyway, after we bought it, we. We knew we'd made a terrible mistake. It was just. Couldn't have been more dumb. There's nothing like owning something to start. You spent your money to see what's wrong with it. You know, it's like buying a house and finding out that there's a whole bunch of things you don't like about it and. Except it's not so easy. And there we were owning Hochschule, going in Baltimore, and we made a mistake. And we all three agreed on that. And nobody blamed the other one ever. Ever. Actually, we had a lot of fun discussing our mistakes. I mean, I don't mean that we sat around laughing about it or anything, but just the very action. It's like being in a war or something. It just pulls you together. When you've got a common problem and you've got wonderful people in a foxhole, would you. And that brings people closer together.

[Becky Quick]

You have had an extraordinary number of just spectacular Friends. That can't be coincidence.

[Warren Buffett]

Well, no, you should be selective about your friends and hope they aren't too selective about theirs. You should be trading up all the time, but you shouldn't be doing it in a deceptive manner.

[Becky Quick]

How, I mean, do you do that consciously or.

[Warren Buffett]

I don't think so. I think you're just attracted to people that. I was attracted to. People who were interested in the same thing I was to an extent. Maybe not as intense as I was about some things or you know, they had different backgrounds and all kinds of things, but, you know, I wouldn't have traded any of my friends for anybody else, you know. And we ended up liking to do things together. I formed that so called Graham group.

[Becky Quick]

Yeah, the Graham Group was.

[Warren Buffett]

Yeah, that came a whole bunch of different people from K. Graham, who it wasn't named after, it was named after Ben Graham. And we met for close to 50 years, about every year and a half or so on average. And all of these people liked each other and they were regarded and their own industry is unapproachable. And they just melded together so well. We started out well, we only thought it was going to be held once Ben Graham was back in the country. And I called 11 people and said, do you want to go to San Diego? And it wasn't as easy to get to San Diego quite as now. And none of us had that much money, although we all had more money than we'd started with. But I called them and said, Ben Graham's in town and he probably won't be in this hemisphere, you know, in our future. And it's a rare opportunity to see him. So he agreed that if we come out he'll spend a few days with us. Charlie was there and I didn't know Tom Murphy then, but the person that introduced me to Tom Murphy was there and then a bunch of classmates, all kinds of things. And we had such a good time that we decided to do it again. Well, Ben wasn't going to stay in the country anymore. He was going back to France. But the next time we did Florida and again we just had a lot of fun. So it became something. And then I would assign different topics. Initially they'd be more financially oriented than they were. You could actually watch the sort of development of the group into new activities as I added people over the years. And they all knew me, but most of them knew each other to some degree beforehand. And we just had a good time for 50 years. And people entered into it in really unusual spirit of no ballooning I mean, there was nobody that was more important than somebody else in the group.

[Becky Quick]

But with the point of learning lectures to a certain extent, learning on things.

[Warren Buffett]

That are learning is always interesting. I mean there's nothing more interesting. Well, there's probably a few things, but long term learning is more interesting. You know what I mean? The idea of a library. Just think of just a few hundred years ago. I mean, there wasn't anything to read with by at night. And when you think of what life was like compared to what it is now, it's wonderful now. It's still for a limited number of people. There's all kinds of people, particularly outside the United States. But I'd rather be born into almost the poorest family if I could be born today in the United States States than to be born anyplace else.

[Becky Quick]

So you think the American dream is alive and well?

[Warren Buffett]

I'd love it, yeah. If it didn't come with the power to destroy the planet, I would say that there'd never been anything remotely as interesting as being born in the United States today.

[Becky Quick]

Do you worry about artificial intelligence?

[Warren Buffett]

Yeah. After a few times when people pretending to be me of going out and scamming people, we just found out about one of them. Even the people that are smartest about said they don't know where it's going. And it's one thing to. I guess you don't know where you're going if you're Columbus, but you can always turn around and go back. But the genie's out of the bottle. I mean that if someone wants to impersonate me in a way to scam people 10,000 miles away or in Omaha, they can do it. And they can imitate my voice and they can imitate my appearance and they can talk, they can fool my kids.

[Becky Quick]

What do you do to stop that? How do you combat it?

[Warren Buffett]

How do you put the genie back in the bottle? That's the same problem we have with the nuclear weapons. We know how to build them and we know how to build bigger ones all the time. The problem is, so do other people. And they've got no use except to kill people or deter the other guy from using his. I mean, that is something to have created in the world. But it was absolutely necessary to do it in World War II. I mean, there wasn't any doubt the Germans were working on it. You can go to search and read the letter that was sent to President Roosevelt just a month before the Germans invaded Poland. Doesn't mean I know anything about it. I know about uranium for 235 or anything. But I do understand human behavior. Hardly complicated.

[Becky Quick]

I guess, when you think about your evolution in thought, we'll go back to this thread of how your views in business have changed. And you've talked a little bit about how your assessment of people, what you learned from Tom Murphy along the way, but just your evolution of thought in business. How would you sum that up? How would you say you're different today?

[Warren Buffett]

Things that I thought I was learning about business that weren't true. Like what if you talk about boards of American companies, that's pretty important. I mean, you're talking about the whole damn country almost with public companies. And the people who are the independent directors are not independent. Usually the money is useful to them.

[Becky Quick]

The money they get for being on.

[Warren Buffett]

The board, being a director. I mean, it's the best job in the world to get 250, 300, maybe five, even up to $500,000 a year for doing something that's quite pleasant. Usually they give you the transportation and they have cars waiting to take you around everything. And everybody's polite and everybody love that job. I mean, who wouldn't? I mean, if I didn't have any money and somebody said, warren, how would you like to be a director of the XYZ company? And you'll make 300,000 bucks a year and all you have to do is show up, meet some other nice people and just don't, don't burp, don't say anything, don't screw it up. And I mean, if I go to that meeting and somebody else, you know, has had 10% of the stock of the company and everything else, but they're not independent, you know, in theory. And what's going to be in the back of my mind, I know how to get a range from 300 to $600,000 a year. And all I've got to do is when somebody's called to come up with a quote, good, end quote, director, that they say, well, I know this guy in Omaha. He'd be a good director. And now you got two people out there that'll recommend you to somebody else because you didn't really cause them any troubles. And if you're the CEO and you wanted to get paid more money and so on.

[Becky Quick]

You mean put them on your compensation committee as an independent director.

[Warren Buffett]

I mean, and the whole idea, idea getting independent directors is that they are independent, that they don't have an interest. And you couldn't have a more obvious interest than doubling your, you know, if you aren't making any money. You know, you're head of a school someplace or something, but they, they don't pay you very much and everything. You make 300,000 bucks a year and you can quit that damn school. It's a pain in the neck. And they'll keep you around probably. So you're 75. And if you're a Berkshire, you might get to be 90 and be on the board. But we don't pay that well what it incentivizes. You know, Charlie was always a huge preacher on incentives. And what do you incentivize by this? While I'm on the subject, I mean, I'm looking at our proxy statement, which is 20 pages long, which we sent out the other day. And when I started in the business, you actually got notice of annual meetings. Sometimes it was two pages longer, three pages. Now almost everybody has 100 pages or more. And quite properly courts or ruling bodies or whatever thought the shareholders are entitled to know how much the CEO earns. And. And there ought to be an explanation, so they stick in there. One item is, how does your salary compare to the average person's salary? It's like 200 to 1. And they think that's going to embarrass CEOs. And of course, what it does is if. And I've been on 20 corporate boards aside from Berkshire's, CEO of ABC looks at this thing and he looks at the XYZ company and he thinks, I'm smarter than these guys and I'm working harder. Whatever they get, I ought to get that plus some more. And then you get this ratcheting effect. And the compensation committee, you know, gets some expert that the corporate secretary picked out who's got the same interests. And you couldn't think of a way to incentivize people more to kick up their own salaries than to have them read what somebody next door is making. It's just exactly the opposite of what's intended. And the independent directors are. The last thing in the world they want to do is get kicked off a board. They'll never get another assignment again. And they aim to please, and you shouldn't expect anything else.

[Becky Quick]

So Berkshire does things very differently than other companies.

[Warren Buffett]

We do it differently because we actually thought through what we've thought through all our policies. That doesn't mean we've come with the right answer, but at least we thought about them and we say, what does it incentivize and what is an incentive? At Berkshire, incentive is obviously, is to have a bunch of people who are thinking about all the other shareholders and who do not really have anything to gain.

[Becky Quick]

So you don't want Berkshire to come conform to what everybody else is doing.

[Warren Buffett]

I want Berkshire to attract people that are smart about business. You want them preferably with an investment that's significant to them, which they bought on the same basis as the other shareholders. And you want to make the job interesting but not remunerative.

[Becky Quick]

What else do you do you think is stupid in business these days?

[Warren Buffett]

A lot? Well, I would say I'll give you one example. It's not quite current, but I think it's very stupid for the CEOs or somebody represents the CEO every couple of months to do the investor relationship calls they do if they conduct them in a certain way. I mean, I'm not saying that all of them, but so many emphasize, here's what we're going to do. I'll give you an example I'm familiar with and I don't even know who started it, but at Wells Fargo many years ago, somebody thought it was important to emphasize how many different services people signed up for at the company. Once a CEO has done that for many months, a they really can't reverse themselves and say this really wasn't important or we find out that it backfired. That just doesn't happen in this world. And then they hand the company off to the next CEO and the next CEO of it, they get on the first call and they say, well, gee, John Smith that ran this place was doing it all wrong. You don't say that. So you continue the process and you keep emphasizing, and nobody's looking at the fact that that's perverting the behavior of millions of people down the world, hundreds of thousands that work down below. And when you do it on calls that go out to people that write stories about your, about your call every time that takes place, you don't want to steer people down the wrong behavior. I mean, it's like with your kids. I mean, they're going to watch how you behave, not what you say at first. They may give you a little leeway at first while they're learning the ropes, but after a while they know, they know what you're doing and just think of that. If they can put some more business in the last quarter or store up a little piggy bank, they're going to do it. I mean it's. And they're serving their master, you know, in effect. And you don't have to issue any instructions to that. And believe me, having been at 20 companies I've seen a lot of that by people they wouldn't think of stealing your newspaper throne on your, on your door. But they, they don't realize the impact of. They like to play with numbers. And once you start playing with numbers, you don't quit. And once you have somebody that handed you the reins to a company and they've been playing with the numbers and you say, well, we're going to give up playing with the numbers. I mean, you just don't do this worldwide.

[Becky Quick]

Outside of the Mag 7, Berkshire Hathaway is now the most valuable company.

[Warren Buffett]

Took a long time in the s.

[Becky Quick]

And P500, but it's something you built. How did things change along the way? As you got bigger and bigger, it got more difficult.

[Warren Buffett]

And I mean, because it's harder to do. It's harder to compound extremely large numbers than small numbers. And I've always known that. I mean, when I heard from $12 to buy three shares of City Services Preferred, doubling my net worth was not a remote possibility. I mean, I just had to go out and, you know, sell more bottles of Coca Cola or do something door to door. So there's just no question that we can't, we can't do what we did before. That doesn't mean we can't do anything, but we can't. We just can't do it.

[Becky Quick]

You've gotten perhaps more conservative with time. I mean, you've always wanted a buffer of cash around and that, that number's gone up over time. I remember when it was 20 billion, maybe 50 billion.

[Warren Buffett]

Well, it's external circumstances. I mean, we. Believe me. If after we get finished talking, you say, I've got a great hundred billion dollars in your idea, I would say, let's talk.

[Becky Quick]

I don't.

[Warren Buffett]

Well, but there's always the chance that tomorrow somebody will say that to me or I've got something.

[Becky Quick]

Because now you have. I don't know what the latest cash amount is. It's over 300.

[Warren Buffett]

It's over 300 billion.

[Becky Quick]

Well over 300 billion.

[Warren Buffett]

It's well over 300.

[Becky Quick]

It's more cash than the value of all of the stocks in the FTSE. 100.

[Warren Buffett]

Yeah. And it means that when I look at the stock market, when I look at companies of a size that would make any difference to our total, I don't see anything. Well, we're buying one or two things, but it's peanuts. But I'm willing to spend 100 billion this afternoon.

[Becky Quick]

Glad I'm here today.

[Warren Buffett]

No, I'd rather have the 100 billion in a really good business bottle at a sensible price and have 100 billion in cash. I know the cash. I mean certain levels necessary, but cash is not a good asset. You need oxygen, you know, you don't need to be surrounded out. You don't have to pay a lot for it or anything like that. But you do need oxygen and if you're ever without it for four or five minutes, it will learn. And cash is that way. So you always need to have it available because you do not know what will happen. I do not know what the stock market will do and I do not know what business will do. I started out with that assumption, you know, however many years ago it was and I haven't learned anything about what the stock market is going to do. I didn't find it. I may have read every book in the public library, but I didn't find the answer then to the question of what the stock market is going to do next week or next month or next year. I tried it all. I did charts and lots of statistics, all kinds of things. I was looking for something, but it turned out I was looking for something that in my opinion doesn't exist. But I still found the game interesting. So then I looked at it through a different set of glasses that Ben Graham handed me and I saw this was a game you couldn't lose really if you followed his rules.

[Becky Quick]

Coming up.

[Warren Buffett]

You know, if you're super rich, you should leave your kids enough so they can do anything, but not enough so they can do nothing.

[Becky Quick]

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[Warren Buffett]

In the military, you could join our family.

[Becky Quick]

Our members saved an average of $70.

[Warren Buffett]

A month on auto insurance when they switched. Tap the banner or visit usaa.com join.

[Becky Quick]

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[Becky Quick]

You have have said that you're going to have 99 plus of your money that is given away to try and solve some of those problems.

[Warren Buffett]

It won't solve them, but it can help solve certain specific problems. If somebody's going doesn't have the money to go to school, a scholarship does, it does some good and how well you administer something like that and how you do the right thing. But there are certain problems with money doesn't or can't solve. And when I first thought about philanthropy, I thought that essentially was the threat that the atom bomb presented. I mean, Einstein in August of 1945 when I was 15 said this changes everything in the world except how people think. But people have thought about it ever since and they still haven't. The only progress they've made is they've gone from what they thought was one country that would have it. And then when the Russians or the Soviets got it, you know, we were terrified with the idea of Soviets in the United States with two pretty sound leaders. I mean, between Kennedy and Khrushchev, now we have eight going on nine. And we know we've got some people that scares the hell out of you if they got a pop gun, nuclear weapon. And the game hasn't stopped. But it was a lot better when only one country had it than one more. I mean, the difference between two countries having a weapon that can destroy each other and one was huge. But now, since then, you know, now the two were the good old days.

[Becky Quick]

Your philosophy on philanthropy again has changed. You mentioned that was at the beginning and you've gotten criticism your whole life for not giving away more money sooner.

[Warren Buffett]

You know, if you looked at the people with their future and with funds, you should use the people who are going to use their money unintelligently. You should have them fund the current expenditures and you should have the people who are going to build the funds for the future actually accumulating your paper now that accumulating their money because you're going to compound it into larger sums and you're going to have it more intelligently invested. And that sounds very self serving, which it is. So we did it much more slowly. And I think I would still do the same thing, but I would have hoped for a better result. And I gave up on the, in effect on the nuclear solving that problem. I don't know how money solves it. I don't think I can drop dollar bills from the sky and get somebody to get rid of their nuclear weapons.

[Becky Quick]

You now have.

[Warren Buffett]

If I could lay out whatever I've got north of 150 and I could pick out three countries that would permanently get out of the nuclear game. I'd do it in five seconds. I wouldn't wait around them. I die or do anything else, just do it. I mean, that would really be something.

[Becky Quick]

Well, now you have north of $150 billion and growing.

[Warren Buffett]

And, well, when it's growing will depend, we'll call it. But the odds are it grows.

[Becky Quick]

Yeah. What do you want done with this? You're not going to sell a single share of Berkshire while you're alive.

[Warren Buffett]

But I'm not going to live that long, you know, I mean, my kids are willing to do it. I trust them 100%.

[Becky Quick]

I've sat down with your three kids recently and talked to them about how they see all of this. Just the responsibility, the enormity of it. The three of you, your father has told the world, are going to be responsible for figuring out what to do with all the money that he has built up in Berkshire over the last 60 years. What did you think when he started telling you that? When he started getting to you guys? When did he come to you? What did he tell you? What were your thoughts?

[Howard Buffett]

I thought, well, we better get along. Yeah.

[Susan Buffett]

Two years ago. A little over two years ago.

[Howard Buffett]

Yeah.

[Susie Buffett]

Yeah.

[Becky Quick]

What?

[Susie Buffett]

How did, What?

[Susan Buffett]

Yeah, I don't know exactly.

[Susie Buffett]

We sort of started talking about it.

[Howard Buffett]

Yeah, I don't even remember.

[Susan Buffett]

It was probably March ish, two years ago, so whatever.

[Warren Buffett]

Yeah.

[Susan Buffett]

Yeah. And you know, just the idea of, wow, you tap dance to work every day for 60 years and then boom, you're gonna.

[Becky Quick]

There you go.

[Warren Buffett]

Yeah, exactly.

[Susie Buffett]

And I don't really remember that. It was like some big announcement to us. He just sort of started talking about.

[Howard Buffett]

It, but he kind of. There were hints kind of as we went through the wills at certain times, some of it evolved and then he just kind of decided. But I think there was a little bit of, you know, telegraphing of some of it. Not exactly in what form or how it would happen, but because we, we went through, you know, when he would do new will, we would sit down and he would say, you know, you have any questions or ideas or, you know, whatever? He began really pretty open about discussing that like at least 10 or 12 years ago.

[Susie Buffett]

Yeah, he's been very open about. Because he's, you know, the will's gone through a few iterations over the years and he's always been really open about talking about it. And you know, if we have any questions, I mean, I always have little notes written all around the pages.

[Becky Quick]

I mean, he's been open about telling the world that, too. That he thinks it's the right way. Yeah, that that's the right way to do it. Especially when your kids are older, you don't want to leave questions afterwards and you don't want them wondering why you did things.

[Howard Buffett]

As soon as he did that, all my kids called me and said, when do we have our meeting?

[Warren Buffett]

I'm kidding.

[Susan Buffett]

But again, the big thing is he amassed this wealth. And so to not be left with a sense of this is what I'd like to see happen with it. I mean, he thinks things through so thoroughly from the time he was in his twenties, writing a friend saying, I know I'm going to be wealthy and I don't to want my kids. You know, he's known for forecasting what's coming. I mean, in terms of the work he does every day, but. And really thinking it through. And so to put this out there, without giving us any explicit instructions, he's given us some sense of what he would like to see happen in an abstract sense, but there's never been. And that, you know, again, frankly, that's a little bit. Gee, I wish we could have a little more guidance, because it's your money, you know, it's not ours.

[Howard Buffett]

Yeah, but that's consistent even in some of the things over the years with Berkshire, because he knows things are going to change and he can't pretend.

[Susan Buffett]

Yeah, he can.

[Howard Buffett]

So, you know, he provides what he feels confident will make sense at the time, or at least thinks will make sense at the time, but not, you know, not try to predict it, not try to.

[Susan Buffett]

That's.

[Susie Buffett]

Yeah, he said years ago, when he's talked about just about STB foundation work, he has said, you know, and this is way before there was as much money as there is now. And he has said, you know, this is what I think matters. Now, my mother obviously was also clear about that. But he's also always said, I don't know if that'll be true in 20 years after I'm dead or 10 years after I'm dead or whatever. And so he's always, I think, not wanted to constrain us with, you know, here's what you have to spend it on. Because he would say that may not matter and then something else will matter more.

[Susan Buffett]

Yeah.

[Becky Quick]

So what guidance has he given you?

[Susan Buffett]

The only thing I've heard is what he's also said publicly, really, which is he hopes that the money can go to people. You know, what word do you use? Less fortunate, below the poverty, whatever it is, that it would in some way affect a Population that normally doesn't have the same kinds of opportunities that certainly we have and a lot of people don't have. That's all I've had.

[Howard Buffett]

The biggest challenge will be balancing the fact. But he has provided, when I say this, he's provided some cushion on this, but, you know, balancing the fact that he wants to see this money spent in 10 years, more or less, and then balancing that with how you lose control over Berkshire voting shares, I mean, that's the biggest. Yeah. And you can't figure that out until you're in that moment and as some time starts to go by, because there's going to be. The dynamics change. There's going to be things that happen that no one on that board, none of us can try to, you know, anticipate even. We can anticipate some things. Some things will be obvious and others won't be so obvious and you don't know who they are, you know, what they're after. So, you know, that could affect how fast you want to lose or give up voting power.

[Becky Quick]

Right. It feels like you have a little flexibility on that count, too.

[Susie Buffett]

Yeah. Just as he has gotten more flexible. Yeah, yeah, yeah.

[Becky Quick]

What did you think when he said that you three were going to be doing this, doing it together? It had to be unanimous and you're in charge of all of it. Did you want the job?

[Susan Buffett]

Nope.

[Howard Buffett]

Peter really didn't want.

[Susan Buffett]

I did not want.

[Warren Buffett]

And I made that point.

[Howard Buffett]

Yeah, yeah, Peter.

[Susan Buffett]

And honestly, when I called him up and said, you know, I want to opt out, he said, I don't blame you.

[Howard Buffett]

We'd say that to all of us.

[Susie Buffett]

He actually thinks it's kind of funny that we have to do this and.

[Susan Buffett]

Understands that it'll put us, obviously, enormous pressure on us. And so the idea, again, like we've been saying around, what are we going to do? It's like there's too many variables. We have no idea what we're going to. To do in this moment. And. And that's great that we all know and agree that we can't start saying this. This is. Yeah.

[Becky Quick]

As a parent and an outsider watching this, the vote of confidence in the three of you, how much he trusts you is the thing that kind of jumped out the most. Does that hit you, too?

[Susie Buffett]

Yes. And it's very nice. I mean, you know, it really.

[Becky Quick]

It is.

[Susie Buffett]

It's a huge, giant compliment, I think.

[Howard Buffett]

That none of us, you know, so we have a very different view of it. Growing up in the environment that we grew up with and how we see you know, my dad and how we see my mom. So I think, you know, for us, in a way, it's a surprise, and in a way, it's not a surprise. He knows 100% that we are going to try to execute exactly what he asks us to do. And then he knows that we've had a lot of experience now understanding how to figure out the things that we don't know today and how to do those efficiently and effectively in the future. So, you know, to me, in one way, because of how we grew up and the things that we listened to forever from him, it was a surprise. Yeah. And then in another way, it's like, I don't know, he gave us this opportunity for several decades now to figure out how you give money away, how you do it effectively, how you do it efficiently, and how to make those decisions. So in that regard, I would say it's not a surprise because he kind of began preparing us for it.

[Susan Buffett]

And I would just add the other part of this, I think, is that he. He knows nobody can do it certainly perfectly, and nobody is.

[Howard Buffett]

So the only reason why he lets.

[Warren Buffett]

Me do it, I mean, there is.

[Susan Buffett]

The element of, okay, nobody's going to do this.

[Becky Quick]

It's just too much money.

[Susan Buffett]

It's unfathomable what we will be charged with, and why not us, who is closer to the source and has grown up and all the things? So.

[Warren Buffett]

But when.

[Susan Buffett]

Yeah, there's an element of. It's. It's a beautiful gesture and. And it's a convenient gesture to something. He would say that, you know, and, okay, yeah.

[Howard Buffett]

But when you start trying to write 200 and $300 million checks, you know, only institutions can absorb those, or governments.

[Becky Quick]

And.

[Howard Buffett]

I'm not a big fan of writing checks to institutions or governments. So, you know, in some ways, we're going to have to make some decisions that we typically wouldn't make, but we have to make sure that the money's used and used as well as it can be used. So we'll be making decisions that we typically wouldn't have made today sitting here.

[Susie Buffett]

And we'll make some mistakes.

[Howard Buffett]

Oh, sure, yeah, yeah. I'm good at that.

[Susie Buffett]

And that's okay.

[Warren Buffett]

I do that all the time.

[Becky Quick]

Well, I mean, it's just. It's interesting the way your dad set this up, that it has to be a unanimous vote, that everybody has to agree. I mean, it's. It's kind of brilliant, but it's also kind of like, oh, my gosh.

[Susan Buffett]

Yeah, how do we do it?

[Susie Buffett]

I don't think that'll be a problem though. No, and it's, I really don't.

[Susan Buffett]

We'll figure it out. You know, social media, when that first came out, I'll tell.

[Warren Buffett]

Oh my God.

[Susan Buffett]

There's gonna be, I'm thinking you're telling us more about your childhood.

[Warren Buffett]

Yeah.

[Susan Buffett]

Than you are about ours.

[Howard Buffett]

So there's, Yeah. I, I, you know, and, and we'll make some trade offs with each other.

[Susie Buffett]

Yeah. I mean, there's so much money. I mean, getting in a fight about it is. Seems crazy, right.

[Susan Buffett]

You know, pop culture has succession or you know, these various shows that show all this stuff and that's what people love to feed on is like, where's the problem gonna be? And all the, and we have had no trappings of any of that growing up. So we're just not, it's, we're not.

[Howard Buffett]

That we grew, we grew up expecting nothing, to be honest. I mean, to put it simply. But I mean, you know, we, we were told that we had to figure our own stuff out and we were allowed to fail and make mistakes and then we understood the consequences. And so I think, I think Peter's really right on this that, you know, you watch the show. Did you say that again? Yeah, I think you're right.

[Warren Buffett]

Yeah.

[Howard Buffett]

You won't hear it again. But you know, it's like watching the show Dallas or something. I mean, that's been on there for a long time. But you know, all this stuff and it's like we don't have any of that drama. We don't have any of that. I mean, it's just, it's not like it just doesn't happen. And so I think people have this false, well, not everyone, but you know, some people have this false impression what our family's like. I think most people probably have a.

[Susie Buffett]

False impression of what it's like.

[Howard Buffett]

And so that would, then, you know, it would extrapolate that into this whole idea that we're going to give away all this money. How the hell are we going to get along and do that? And I just don't think it's going to be hard.

[Susie Buffett]

You know, my dad wasn't rich and famous when we were kids. We did not grow up. Like people probably think we grew up and we didn't. So.

[Susan Buffett]

Yeah.

[Becky Quick]

How did you grow up? Describe it.

[Susie Buffett]

Around the stable. Normal. I mean, we grew up, you know, we were certainly very fortunate. We didn't need anything. But, you know, we went to public school, we lived in a regular neighborhood, we hung out with our friends. We didn't. With the exception of a deal Howie made with my dad. But we didn't get cars. When we turned 16, I rode the bus to school. You know, until. Yeah, until I got out of high school. We didn't. We grew up in what I would call sort of a normal middle class, on the upper side of middle class. But we weren't living in the rich neighborhood. We weren't. It was pretty normal.

[Becky Quick]

You didn't even know what your dad did at one point.

[Susan Buffett]

None of us did.

[Susie Buffett]

No, we didn't. None of us really knew.

[Susan Buffett]

But you have the story.

[Warren Buffett]

Yeah.

[Susie Buffett]

Yeah. Well, that was in first grade when we had to fill out those census cards. Or second grade and I wrote. My mother told me to write security analyst. And I thought he checked burglar alarms.

[Susan Buffett]

So there's that. And then in my career, most people thought I was related to Jimmy Buffett.

[Howard Buffett]

But, you know, we used to. I mean, not that this is any big deal, but, you know, we'd earned this allowance for, you know, cleaning out gutters and cutting the lawn and raking leaves and stuff. But Warren got pretty clever and he started giving it to us in quarters. And then he bought a slot machine.

[Susie Buffett]

Dimes.

[Howard Buffett]

Yeah, dimes.

[Susie Buffett]

A dime.

[Warren Buffett]

Dimes.

[Susan Buffett]

The first.

[Howard Buffett]

Yeah. And then he bought the.

[Susie Buffett]

He got it all back.

[Howard Buffett]

Yeah, and then he bought the slot machine. So he would get most of his allowance back. At least with me, he got a lot of it back.

[Susie Buffett]

But I mean, we were all up there. The neighbor kids would bring their dimes over.

[Susan Buffett]

Yeah.

[Howard Buffett]

He probably get three watermelons when you pulled the lever. Yeah. So, you know, so teaching you about.

[Becky Quick]

Gambling along the way too.

[Susie Buffett]

Right?

[Howard Buffett]

But we never did. I mean, I'm about the most anti gambling person there is.

[Becky Quick]

Because you lost all your dimes, right?

[Howard Buffett]

Yeah.

[Susie Buffett]

We all had jobs too, when we were kids, you know, it was. It was pretty normal, which I'm grateful for.

[Howard Buffett]

Now, I think Susie made this point that, you know, we weren't. We. We weren't. My dad wasn't rich growing up, you know, I mean, we. When we grew up, he was driving a Volkswagen for a while, then he had to start picking. Yeah, he started having to pick business associates up at the airport. So, you know, he upgraded to, you know, a Cadillac. But, you know, I mean, it was only because he had to. It wasn't because he wanted a Cadillac. He didn't care what car drove. Yeah. Yeah. And my mom used to drive. God, she would take me to my after school stuff in Uncle Freddy's old beat up Station wagon. And I was so embarrassed because it was so. It was like. It's like going to break down anytime. But, you know, she. I think she did it to prove a point to me. Like, it just doesn't matter what you.

[Warren Buffett]

Show up in, you know, what do.

[Becky Quick]

You think that that did to all of you? I would imagine at the time you may not have been super appreciative of it, but what, what do you think? What impact did that have on who you are today?

[Susie Buffett]

Well, one thing I think that had really a huge impact was just living in the house with my mother in general, she was so active, particularly in the North Omaha community. But she was very active in the volunteer things she did. Also Planned Parenthood. She was president of Planned Parenthood. And she lived it. She didn't just write the check, she lived it.

[Becky Quick]

What lessons did you learn from your first wife, Susan?

[Warren Buffett]

Oh, well, I mean, she. She. Well, she understood people in life way better than I did. I mean, I. I knew a lot about stocks. I knew about a lot of things, but she knew a lot about human beings. And she wasn't interested in money at all. She wanted to be sure we had enough. I mean, leave it to me to be sure we had enough. But if I told her we were living on $175 a month, which I think was the original sum, I mean, that was fine. But she would occasionally ask me, are we rich yet? And I would say, well, we're getting close, but just give me another year or two of compounding. But it didn't really mean anything to her, and she would use it for other people in an instant. And she would not only give of her money, but she'd give her herself. And so she really meant it. And fortunately, the kids took after her.

[Becky Quick]

What's an important lesson you've learned from your wife? Ostrid.

[Warren Buffett]

She came from a much tougher life, and she and Susie were very close. And Susie did not want to the life of being just misses Big in Omaha or something like that. So Astra moved in and the three of us lived happily ever after. But it was a very strange arrangement, but it worked for all three people. But Astrid would do. She would rather do something for someone else than do it for herself. I mean, it's genuine. It's not contrived that if she looks that way for a week or a month, that somehow it'll benefit her later on or anything of the sort. I mean, she is exactly what she seems to be, and she's the same person that I Started living with, you know, 1978 or thereabouts. And that's who she is, and that's who I like to be with.

[Becky Quick]

Part of your thoughts on philanthropy evolved over time. You and Susie had some thoughts that you talked about when you were very young.

[Warren Buffett]

Yeah, if you look at my will from. I've got one will that goes back to when I was 30 or something. Susie and I both only agreed on what should be done with money. And. And I said that I would compound money better than most people and so that it made sense for me to be a saver during my life because a typical saver would not accumulate what I was going to accumulate and that she would outlive me and disperse it. Now, we did some things before that, but that's when the big money would hit. And then she died first. But the idea was that she, along with get help in doing it and everything. And we never dreamt that the sum would get so large, but I dreamt it would get a lot larger than she dreamt it would. And it didn't really make any difference to her. And she would have done it earlier, but she understood that. She understood the math of what I was saying. She just wasn't as impressed by it as I was.

[Becky Quick]

How much did you think it would eventually be to give away?

[Warren Buffett]

Well, I didn't think I'd live to be 94. You know, let's say I died when my dad did at 60. I mean, you just don't know what. But I did think that. Well, I always thought we would be rich by general standards by the time I was 30 or thereabouts, which turned out to be true, but it wasn't super rich at all. But I also knew that it would just keep. It would keep growing. But I didn't. You know, my dad had died at 60, and if I died at 60, it would have been a fraction of what it is now. But an awful lot of people would be using the excuse never to give it away. And I never. I didn't feel that way. I mean, we were always, you know, the wills I wrote, I mean, we provided for the foundation we had, which was peanuts. And we did change our ideas on how much the kids should have.

[Becky Quick]

You had to drastically rethink things when she passed away, though.

[Warren Buffett]

I have roughly 14 and a quarter million shares of B stock. And by letters which were delivered earlier Today, I've committed 12,050,000 shares. They're earmarked, held by me, but every July, I will be giving a million shares to the Bill and Melinda Gates foundation. Did I say 10 million? I meant to say 10 million and a million shares to the Susan Thompson Buffett foundation and 350,000 shares each to the three foundations headed by my children, Susan, Howard, and Peter. And that will continue throughout my lifetime.

[Becky Quick]

What has your. I mean, your dad has evolved over your whole lives with him in terms of the basic ideas of what he wanted to do, which was to give the money away, but how he wanted to go about doing that has sort of evolved. At one point, it was the Bill and Melinda Gates foundation, where it was funneling a lot of this money. What's your view of this evolution and his thinking through this? What's it been like from where you all sit?

[Howard Buffett]

It just seems natural to me, to be honest with you. I mean, it's not.

[Susie Buffett]

Don't you think he's. I think he's really. He's mellowed. He's evolved, he's grown. I'm trying to think what other adjectives. But since my mother died, I think I keep saying to people, you know, it turned out he was listening that whole time.

[Warren Buffett]

Yeah.

[Susie Buffett]

It was just fascinating to me how you could kind of see the wheels turning in his head in various ways after she died. I think he knew he needed to step up.

[Howard Buffett]

It forced him to change.

[Susie Buffett]

Yeah. And he needed to step up. Yeah. And he had to. Mom wasn't there to be the person.

[Howard Buffett]

Who was the buffer.

[Susie Buffett]

The buffer. The person talking to us, I always say the governor. I just think it's been so interesting to watch him evolve through all this. And also, she died in 2004, so 21 years ago. And I think his thinking about things comes from a lot. From her and now. Well, with the gate, you know, with the gates. When he. When he gave the Money away in 2006, we were how many years younger? Almost 20. Horrifying, but true.

[Warren Buffett]

Yeah.

[Susie Buffett]

You know, and we had very little experience, and I think he's watched us over the last 20 years. The other thing that I think has helped, first of all, it's easier to get along when things are set up the way they are with three separate foundations. I've encouraged friends of mine who have a lot of money, who have their kids in a. In a foundation to split it up, you know, everybody. Because some people have said to me, oh, but I think it'll help them get along better. No, it'll help them not get along better is the truth. So I think that was really smart on my dad's part to do it. Well, I guess mom was alive when that happened. She probably was the one that thought of it. I'll give her a lot of the credit, Howie. And so I think that was a really smart thing to do, and I think that's helped us because we've all been able to do what we want to do. And I think it's safe to say we all get why each other likes and cares about the things we all care about, and we all respect it.

[Becky Quick]

You guys have done this for a long time. It's not as easy as it looks. Tell me a lesson, something you've learned along the way that people on the outside would be surprised to hear.

[Susie Buffett]

Well, things sometimes don't work out the way you think they will. Yeah, sometimes that's a good thing.

[Susan Buffett]

I was going to say that can be a good thing, or it can turn even better than you thought.

[Howard Buffett]

We call those successful failures. Yeah, sometimes, I mean, you learn enough.

[Susie Buffett]

You learn from it, and sometimes you just learn that it didn't work and you couldn't have done anything else. But sometimes you learn it didn't work, and here's why. So you change it.

[Becky Quick]

Right.

[Susie Buffett]

You know, so I, I, we did.

[Howard Buffett]

A complete annual report about our failures one time maybe 10 years ago or something. You should have seen what it took to get information from our partners.

[Susie Buffett]

I want every bit of bad news. If there's bad news and, and it makes the, it makes the non profit nervous and the evaluators think, oh, if I tell them it's bad, I might not get hired again. You know, you have to get super clear with people about, you know, it's okay. Yeah, it's okay. We want to hear everything.

[Susan Buffett]

And also to what Susie's saying, the performance aspect of all of it can just be something to navigate and figure out where all the distortion is, because people are telling you things they think you want to hear, or you'll say something and they'll just be listening for that word that they need to use to get the thing. And it's.

[Susie Buffett]

And I would even say in, in Omaha with, you know, my staff has said to me many times, it's so refreshing to be in a place where we can screw up, we can make a mistake.

[Howard Buffett]

I mean, one thing you have to do, I think, to develop leadership within your own organization is to give people enough space and enough responsibility to make mistakes. And then how you react to that is super important.

[Susie Buffett]

Yes. Not you're fired.

[Howard Buffett]

Yeah, yeah. So I mean, you know that. But that if you're going to build a competent staff and people who can learn the kind of judgment you want them to have.

[Susan Buffett]

And you're sort of charged with taking risk.

[Howard Buffett]

Yeah.

[Susan Buffett]

You're bound. Yeah.

[Howard Buffett]

But at the end of the day, you know, and they've probably done this too. But, you know, we. I have been in places where I've made a $50 million decision right there after a two hour meeting. And it was like, we want to do this. We're going to spend the money. And people are like, okay, let us know when you make the. No, I'm making the decision.

[Warren Buffett]

We made it.

[Howard Buffett]

It's going to happen. Now you have to follow our rules in terms of, you know, how we give the money and all that.

[Warren Buffett]

But you usually.

[Howard Buffett]

That gets done. So, you know, I.

[Susie Buffett]

That's the other thing that's unique.

[Howard Buffett]

I think it's a huge luxury.

[Susie Buffett]

Yeah. Because most foundations, the staff isn't allowed to, you know, make any decisions or even say, we're interested in this, we might want to do this. And then they have to have a board meeting.

[Susan Buffett]

Right.

[Susie Buffett]

And then the trustees have to look at it and they vote on it and decide if it's going to happen. It's. And it just, it drags everything out.

[Becky Quick]

Slows the process a lot.

[Susan Buffett]

And the performance.

[Susie Buffett]

Right. It just changes the whole way everything works. People are always amazed that we just do it just like how I said, it's like, yeah, we can do it.

[Howard Buffett]

It's fun, actually.

[Susie Buffett]

Yeah.

[Becky Quick]

Hearing you all describe that, it just occurs to me that it sounds an awful lot like the philosophy that your father and I guess your mother used with you.

[Susan Buffett]

To be honest, there's way more of that at work that I think people.

[Susie Buffett]

And it's also the philosophy I think he uses at Berkshire.

[Becky Quick]

Yeah.

[Susie Buffett]

I mean, he makes decisions like that.

[Becky Quick]

What I just heard from you three, I cannot believe how much you all are so much like your father and how you do this. Like, really so much like your father and how you take these operations. It's the same way he does.

[Howard Buffett]

We taught him a lot, but I was listening.

[Becky Quick]

It never occurred to me until I was sitting there listening and it was like, wow.

[Susan Buffett]

Yeah. And then you throw our mother in there. You've got a pretty potent.

[Howard Buffett]

Well, I always say, if it weren't.

[Warren Buffett]

For my mom, I'd be in jail.

[Susie Buffett]

If it weren't for my mother, my dad would be in jail.

[Howard Buffett]

Yeah.

[Susan Buffett]

If it weren't for my mother, I wouldn't be here.

[Becky Quick]

I didn't realize until sitting down with them how similar they are in terms of how they think about things. All different areas of interest and expertise. But how similarly they view things in relation to how you view things. I was actually very surprised.

[Warren Buffett]

Well, that surprises me a little too, that they. Well, they would disagree with me on a lot of minor points, but they don't disagree with me on major points. And they didn't disagree with their mother. I mean, they were raised in a household that behaved generally inconsistent with what their parents. They didn't have to watch hypocrisy. There's a lot of things that they were affected by favorably that they didn't see. Now, they had all kinds of gripes with. And I was tougher with them than I should have been, probably looking back. But I just kind of couldn't imagine how well they would all. All three of them would turn out. And of course, I didn't imagine that they would be the ones that were disposing the money. I thought Susie Senior would be doing it.

[Becky Quick]

I guess some of the things that struck me as being so similar to you is how your children view running their organizations. They are all running large charitable organizations that give away a lot of money with very small staffs. Staffs the size of.

[Warren Buffett]

But a lot of personal involvement and.

[Becky Quick]

A lot of personal involvement. They're on the ground making every one of those decisions. They don't like bureaucracy, I think, any more than you do.

[Warren Buffett]

No, no. That's one thing that they've seen it now. They hadn't seen it when they were 20 or 30. You know, I mean, you should be wiser in the second half of your life. I should be. My kids should be.

[Becky Quick]

Be.

[Warren Buffett]

There's nothing that really is important with money that they can't do on the other end. They can't sit around doing nothing. And that goes back to the line that I think that. I think King Graham may have said this too many, but Cedar. But you know, if you're super rich, you should leave your kids enough so they can do anything, but not enough so they can do nothing. I get credit for that line. It was not original with me, but I don't know who said it first.

[Becky Quick]

Still ahead, there's nothing magic.

[Warren Buffett]

You just have to think a little and use a little discipline.

[AT&T Business Wireless Narrator]

Pandora makes it easy for you to find your favorite music. Discover new artists and genres by selecting any song or album, and we'll make you a personalized station for free download on the Apple App Store or Google Play and enjoy the soundtrack to your life. This episode is brought to you by Schwab Market Update, an original podcast from Charles Schwab. Join host Keith Lansford for this information packed daily Market Preview delivered in 10 minutes or less, including projected stock updates, monetary policy decisions, and key results and statistics that may impact your trading. Download the latest episode and [e-mail] MarketUpdatePodcast or find Schwab Market Update wherever you.

[Becky Quick]

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[AT&T Business Wireless Narrator]

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[Becky Quick]

You know Warren, over time you became so much more than the CEO of Berkshire. I can think back to times like after the financial crisis when you would come on our air and basically try and calm people down. They were worried about what the stock market market was doing. They were worried about what was happening to their money. They were worried about what was going to happen to their jobs.

[Warren Buffett]

They weren't just worried, they were scared. They were scared stiff. That happens periodically in civilizations and it doesn't happen to me in terms of making business decisions. I mean, where else when you can buy something good cheaper do you get upset about it?

[Becky Quick]

But I wonder when it occurred to you that you could be the voice of authority that could come on the air and calm people down. Fireside Chat sort of. I mean, that's much more than just being.

[Warren Buffett]

Well, I would like to talk, and I always like to talk to older people. I can't find older people anymore. But that's another separate problem. But I used to, you know, when I'd go over to choir practice or something at the Dungeon Presbyterian Church, I'd have a kind of a little route of women who were washing dishes or doing things that they had to do in those days. And I would just make stops and I would do most of the talking. And then for one reason or another, something happened. I was still was the same way privately, but I got so I was terrified of public speaking and so I took a course when I was I actually took the course when I was 21. I guess I actually signed up for the course when I was in Columbia, the Dale Carnegie course, and I'd written them a check and I stopped payment on it and I just, I was terrified of speaking in public. I couldn't breathe when I did. Otherwise everything was fine. But I Just couldn't breathe. And. And I don't know what caused that. I obviously had. I've got a theory, but obviously I had something that happened that I must have gotten embarrassed in front of people because I could still talk to people individually and couldn't stop talking to them practically, but that happened. And then I knew that if I didn't start talking in front of people, I knew I would revert back to where I was, and I didn't want that to happen. So I went out to the University of Omaha, which is now University of Nebraska in Omaha, and they had nine classes and different things. And I just said, I'd like to teach here. And I said, well, you don't have a PhD. And I said, well, I barely have a master, but I'd still like to teach. And fortunately, I didn't know it at the time, but the three. Three judges of whether I would be allowed to do this with Dean Thompson, who was going to marry his daughter a little later, and he really liked me and Dean Helmstetter, and his daughter was the first girl I kissed. And Dean Lucas, he liked me, too, and I liked his daughter, too, but not Jordan. So. So I think I probably got a unanimous vote there. And then I kept teaching every year, essentially, for 67 or 68 years, something like that. And I did it every. I mean, I did it with college students. I did it with groups of women that Creighton University got together. I did it at the Scarsdale Adult School. I did it, you know, I just couldn't stop talking.

[Becky Quick]

And you felt the need to teach because.

[Warren Buffett]

I loved it. You know, it appealed to my didactic style, and I liked my own ideas. I just had fun teaching, and I still do, except I ran out of gas a few years ago.

[Becky Quick]

Is that, you think, what made Warren Buffett, I mean, becoming Warren Buffett. You are more than just the CEO of Berkshire. You are.

[Warren Buffett]

I've been a teacher.

[Becky Quick]

You've been a teacher and a national idea. And when you talk about teaching, that's what you've done with the shareholders for years, and probably why you have 40, 50,000 of them show up for these annual meetings.

[Warren Buffett]

Yeah. And in 2008 and 9, everybody was terrified. And it was a scary time. I understand. You know, but actually, George Bush got it. I mean, he went out there on the lawn and basically said, I don't know what the hell's happening, but it ain't good, you know, and he said it more colorfully than that, even. And so he turned it over to guys that were very able. Tim Geithner and. But probably Hank Paulson more than anybody else. And he gave him a lot of authority. He was restricted in how much authority he could give because he had a Congress that really had the power of the purse. And luckily. And Hanke had somebody that just. He needed to ignore the rules. He, you know, he found something to hang it on, you know, but he did what was necessary. He's kind of like Paul Volcker was at the Federal Reserve. Same exact type, except Hank made a lot of money, and Paul Volcker never made any money.

[Becky Quick]

But the thing that has always struck me is anytime there's a crisis, you're getting calls from the government, you're getting calls from the players who are in big trouble. When the financial system's in trouble, you're going on and trying to calm down investors and make them realize. Probably.

[Warren Buffett]

But I won't say anything. I don't believe.

[Becky Quick]

You always do speak very honestly. And I think that's why people.

[Warren Buffett]

That's why people listen and why they listen. Yeah.

[Becky Quick]

This is a mantle that's developed over the last 60 years. Was there a point where you realized that this was a mantle you were carrying?

[Warren Buffett]

Well, it became evident after quite a while, though, that because I started investing. Well, I started out as a stockbroker, then I went to work for Graham, and then I came back to Omaha. But then I actually. I had seven members, basically, of the family that said, we want you to. We want to know what to do with our money. It wasn't that much in total. And they said. I said, well, I'll do it on these terms. And I wrote out something that was a limited partnership agreement. And then it sort of inched along. We never had a single institution. I mean, it's just a different game than that. These were people, you know, like my dentist and the dental assistant that was there, you know, put in $5,000 and then I got out of it in 1970. But the people stayed with me, a lot of them in terms of Berkshire. So life takes funny turns. You don't know what they're going to be.

[Becky Quick]

So if somebody, your dentist and your dental assistant put $5,000 with you when it was just your partnership and they stayed with you through it, what would that be worth today?

[Warren Buffett]

A lot. A whole lot. And some of them, you know, they added to it. Take the Davis family that introduced me to Charlie. You know, I mean, I told them I wouldn't tell them what I owned and they could get out, I think, twice a year or once a Year and not to ask me what. How things were going, because I didn't want to be under pressure to try and do something I couldn't do. So I ran it like my own money.

[Becky Quick]

Warren, I think people come to you because you've seen so much, you've experienced so much, and you're so willing to share what you've learned along the way. If you go to the annual meeting, people might ask you about what happened at the BNSF last quarter. They might ask you about GEICO Insurance. They might ask you about your thoughts on U.S. treasuries. Or they might ask you what's the most important lesson to life. I mean, you get a pretty wide variety. Those philosophical questions come at you pretty fast.

[Warren Buffett]

Yeah, well, if they ask me that last one, I'll need help, so. But no, in the end, you. You're talking to one person that asks the question, and every now and then, somebody wants to sandbag you in some way. But over time, you'll learn how to handle that, basically. But those people aren't coming to sandbag me.

[Becky Quick]

They came because they wanted to hear your advice and Charlie's advice. Yeah.

[Warren Buffett]

They come and ask about who do I marry, Right? Yeah. I said, well, Charlie's the expert, but Charlie. I mean, those are important questions. And Charlie answered, you know, you marry the best person that'll have you. I mean, it was a very practical answer.

[Becky Quick]

So what do you tell these people who come to you looking for advice on these things? What's the toughest question you've ever got? And what's maybe the best answer you've ever given?

[Warren Buffett]

That's a good. That itself may be the best, the toughest question. No, I mean, I have the ability, to some extent, because of where I am in life, that people will listen to me and they'll hear the same damn thing they would hear from somebody else, but they'll just pay more attention to it. They know I don't have an axe to grind. I'm not selling them time by the hour. I'm not doing anything. And I've got this didactic streak. So if I like them, I will talk to them. And I like to talk to big groups. That's why the college students. I just love the idea of. We had 200 schools that wanted to come every year, and they would ask me great questions, and they'd all have a good time and I'd have a good time. But one of the things I would tell them, it's kind of simple advice, but I would say, you know, let's just take the class you're in back at whatever school it may be, and maybe there's 300 students in it, you know, and you could get 10% of the earnings for the lifetime of five of them. Which would you pick and why? And you won't pick the one with the highest iq. You won't pick, you know, the best athlete, and it won't pick the best looking, you know, all kinds of things. And just examine that. And then I would tell them, now, let's say you got to sell short. This is more fun. And five of them, and who do you sell short? And then, of course, I explained at the end, you can be the person that you would buy. I mean, there is nothing impossible because it isn't whether you can throw football 60 yards. And it doesn't. You know what? There's all kinds of. The one with the highest iq, you can be one of the five, and why not? So you want to be on that list. I just have fun with giving advice. It's kind of obnoxious, but it's.

[Becky Quick]

You've got a long line of people waiting to ask you questions like that. But if there was one word, maybe two words, on what it is that creates success, what is it? If it's not iq, if it's not. Not your athletic abilities, if it's not how much homework you've done, what is it?

[Warren Buffett]

Well, it depends how you find success. But if you define it as, you know, many people, it's how much they earn, and that determines an awful lot of things that happen with their family and everything. It's luck, a lot of it. If you choose the right parents, you're rich when you come out. I mean, you have won the lottery, the ovarian lottery. And if you're born rich, your father's established a trust fund for you already. You're creating a dynasty. You don't have to do one thing in this life, and you can live better than all kinds of people who work their tail off. And I don't like that myself, but that is a reality. So the easiest way to become rich is to pick the right womb to come from. But an awful lot is luck.

[Becky Quick]

But when you're telling students who come to see you, hey, you can be that student that you would like to bet long on by doing what?

[Warren Buffett]

Well, you can do it by being a good person, by reading a lot, by. By spending less than you take in. I just tell them, you know, you can spend 110% of what you earn once, and then you used it up. I mean, the rest of your life you're underwater. And why in the hell do you want to be underwater? And why do you want to borrow money on credit cards? And we own credit card companies. I mean, you know, people. People love spending beyond their income. A lot of people. People and just forget it. And nothing wrong with a mortgage on a house when you're at some point, but even that, I'd be careful. You know, the people that aren't worried about money, on balance, are quite a bit happier. People are worried about money, and there's nothing magic. You just have to think a little and use a little discipline and. And of course, who's inclined to use a lot of discipline when they're teenagers or in college? I mean, you know, I understand that, but I will tell you that don't get in debt. And, you know, I used to tell students back many years ago, I could make 150 bucks a month delivering papers in the morning. Well, what'd it take? An extra hour and a half? Just get up an hour and a half earlier, have 150 bucks? Charlie. Charlie used to sell himself the best hour of the day. He was charging $20 an hour for legal advice, and he just decided that his best hour was from 6 to 7 in the morning. So he was just going to sell himself that hour. And that's not crazy. Your future is your future, and you can't expect anybody else to do it. And beyond a certain point, if you get in a hole or anything, it is difficult to dig out. It isn't that it's impossible. And I give credit to people who do it, but do it the easy way.

[Becky Quick]

One of the things about you is that you have stayed so much the same over the years. You're still living in the house that you bought 60 years ago.

[Howard Buffett]

Yeah.

[Warren Buffett]

60, 65. 67 years.

[Becky Quick]

Okay, 67 years ago.

[Warren Buffett]

Yeah. Yeah. 30% of the life of the country or something like that.

[Becky Quick]

Why haven't you changed?

[Warren Buffett]

Why haven't you wouldn't be happier anyplace else? And Susie was going to be happier, and that likely meant that our kids were going to be happier. Normal.

[Becky Quick]

What are you proudest about with your kids?

[Warren Buffett]

Oh, I just. The fact that they took it after their mother. No, they really. It was a good thing. Probably a good thing that. Well, we weren't rich early. They never saw us behave like we were extremely rich or anything, although they saw us fly off to New York and do different things. Anyway, we have plenty of fun. They saw me very intense about investment management and obviously proud of the results and all kinds of things like that. But they didn't see us craving money just to show other people that I've got money and you don't, ha ha. Type of stuff. And they didn't see any dynasty building, whereas they saw it some other places in Omaha. They had a good feeling about what life was about, but they still did a lot of crazy things. But of course, I did, too. You're going to do crazy things when you're one thing, you should. It's a difficult thing because you should be very forgiving of yourself, but not totally forgiving yourself. But there's no sense looking back and saying, you know, if I hadn't done this, if I hadn't done that, it just forget it in life, you know, nobody cares. I mean, it is history. You can't change it. You can change your behavior going forward, but. And your second half of your life should be better than your first half. The problem is you don't know what it's a half of what. But you should be wiser when you get older. And I think my kids have all become quite a bit wiser. And I think they were always intelligent. They all showed the same kind of things that kid show. I mean, my dad was always very forgiving of my misbehavior. He'd just say, I know you can do better. And that's pretty. That was very powerful stuff. I mean, because I could do better. I mean, I knew it, he knew it, and I was behaving like a jerk for a long time. And it's nice to have somebody have faith in you. If you want to have good children, be a good parent. I mean, you just care about them, but you don't expect. You don't give them lectures about doing bad things when you're doing the bad things, and they're actually just acting like teenagers.

[Becky Quick]

You feel good?

[Warren Buffett]

I feel terrific. Yeah. But I know it won't last forever, But I know it never would last forever. And in 94, I abandoned. I won a game I didn't deserve to win. Well, that's fine. I accept that. You know, this is our kind of world, folks. But, you know, the one quality that I measure people by enormously because everybody can. Everybody can do it. And that's why the people are kind. I mean, that is something that really doesn't cost you anything. It is an act that doesn't belong to any religion, doesn't belong to anything. And why in the world wouldn't you be kind I mean, and some people are and some people aren't. But you feel better if you're kind, I think, too. Johnny Agnelli, one time. I only met him one time. Johnny Agnelli of, you know, the Fiat Group. He was really. He was quite a guy. And I met him one time and he said, you know, when you get old, he says, you got the reputation you deserve. He says, you can get away a long time with the other. And he was reflecting, you know, But I mean, if you look at those people I named, whether Tom Murphy or Sandy Goddessman or Walter Scott, they had the reputation they deserved in the end. But of course, if somebody dies at 40 or 30 or, you know, I mean, that's a different situation. But if you live a long time, you've got it. And kindnesses, it just doesn't cost anything. You haven't given up anything. It's just so easy, and you get it back with interest.

[Becky Quick]

Warren, we've covered a lot of ground. Is there anything that you feel like we've missed out on? Anything?

[Warren Buffett]

Oh, I would just ask anybody to challenge me on whether being kind of couldn't hurt them in any way and whether the net happiness of the world wouldn't be better if they just. If every morning they said to themselves, you know, I'll have things that are good and bad that happened to me today, but I can be kind to anybody.

[AT&T Business Wireless Narrator]

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