Warren Buffett’s net worth currently tops $108 billion. That’s enough to make him one of the five wealthiest people in the world.
That massive fortune was made primarily through Buffett’s investment in Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B). But he isn’t the only Berkshire billionaire. Here’s how others joined the club.
Billionaires and centimillionaires
Buffett’s annual letters to Berkshire Hathaway shareholders are always fascinating reading, in my opinion. In his latest letter, the legendary investor wrote something that I found especially intriguing. Buffett stated: “There are many Berkshire centimillionaires and, yes, billionaires who have never studied our financial figures. They simply know that Charlie [Munger] and I — along with our families and close friends — continue to have very significant investments in Berkshire, and they trust us to treat their money as we do our own.”
Some individuals have made fortunes of $100 million or more by investing in Berkshire Hathaway stock. A subset of those has even made at least $1 billion.
Buffett didn’t disclose the exact number of these Berkshire centimillionaires and billionaires. However, note that he used the word “many” in describing those who don’t pay attention to the company’s financial statements. Certainly, some of the individuals who have become wealthy by investing in the stock do analyze the company’s finances.
This raises a question: How did one stock make quite a few people so ridiculously rich? There are a few different paths.
Buffett’s business partner Charlie Munger is the first Berkshire billionaire other than Buffett who comes to mind. Munger became Berkshire’s vice chairman in 1978 and was one of Buffett’s friends before then. His net worth stands at $2.3 billion today, although not all of it is due to his investment in Berkshire Hathaway.
Another friend of Buffett has also made billions from investing in Berkshire. Bill Gates invested in the conglomerate years ago. Of course, he made his fortune first by founding and leading Microsoft. The multibillionaire gave much of his money to the Bill and Melinda Gates Foundation Trust, which now owns Berkshire shares worth close to $7.7 billion.
Some Berkshire billionaires made their money by owning major stakes in companies that were acquired by Berkshire. For example, Larry Van Tuyl sold his car dealerships to Berkshire in a deal that closed in 2015. The Van Tuyl family is now worth around $3.5 billion.
There are also individuals who simply bought shares of Berkshire Hathaway and held long enough to become billionaires. Stewart Horejsi is a notable example. After reading John Train’s book The Money Masters in 1980, Horejsi began scooping up Berkshire Hathaway class A stock when it was only $265 per share. Today, he and his family have a net worth of close to $2.7 billion.
Could you become a Berkshire billionaire now?
It’s theoretically possible for you to still become a Berkshire billionaire. However, you’d probably have to start off with a sizable fortune to do so. Berkshire Hathaway’s market cap of over $680 billion makes it one of the largest companies in the world. Turning a small initial investment into $1 billion would be highly unlikely for a stock with such a huge market cap.
But if you want to get rich, Buffett revealed his “secret sauce” in his latest letter to Berkshire Hathaway shareholders. He summarized that secret in one sentence: “The weeds wither away in significance as the flowers bloom.” In other words, Buffett recommends that you invest in a portfolio of stocks and hold on to the successful ones for the long term. He added, “it helps to start early and live into your 90s as well.”
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Keith Speights has positions in Berkshire Hathaway and Microsoft. The Motley Fool has positions in and recommends Berkshire Hathaway and Microsoft. The Motley Fool has a disclosure policy.