“In 2008 Warren Buffett became the richest person in the world, with a total net worth estimated at $62 billion by Forbes and at $58 billion by Yahoo” (Wikipedia). Apparently, at his peak, he possessed $64,000,000,000 and was the 25th richest person in the world since the beginning of time.
An interesting BBC Radio profile of Buffett (recorded 2011, c 15 mins, download) by Mary Ann Sieghart sheds light on some areas of his life which are curiously omitted from that Wikipedia article (and from which the following quotations are taken unless otherwise credited).
Sieghart: “[Buffett] has none of the pretensions of most wealthy Americans. He still lives in the same modest house that he bought for $31,000 dollars in 1958”, and spends very little money on himself. He made his billions by making investments. Buffett was born in 1930. His father was a stockbroker. “His mother was mentally ill and had a fierce temper. Her children bore the brunt of her rages, particularly Doris, [his] older sister.”
Doris: “She would go on a rant and it could last for hours and you’d have to stand there and listen to it. It was all terrible stuff about how bad I was, and how I didn’t amount to anything.”
Sieghart: “The abuse from his mother has shaped Buffett’s entire life, says Alice Schroeder [biographer and friend].”
Schroeder: “Warren was terrified of his mother. He once told me that, by the time he was three years old, he was broken and it could not be put together… Psychologically broken, that his soul had been split apart and his feeling of his worth as a human being had been devalued so much that it could not be fixed.”
Sieghart: “So, do you think this attempt to make as much money as possible was to try to make himself worthwhile?”
Schroeder: “Yes, I do believe that the money gave him a feeling of completeness and worth. The best way that he could earn what passed for affection in their household was by performing and succeeding with the little businesses that he started as a child [he bought his first shares aged ten] and by earning money, and that proceeded through the rest of his life.”
Fast forward to the wealthy Buffett. What did he do with his increasing fortune? “He used to hoard it, much to the annoyance of fellow Nebraskans who expected him to support local causes”, says Sieghart, “but, in the past few years, he has become one of the world’s biggest philanthropists.” At the time of the recording, he had given away $11 billion, mostly through the Gates Foundation.
“To his family, though, Buffett has been less openhanded. When his pregnant daughter, living in a tiny apartment, asked for a loan to extend her kitchen, he said no.”
Schroeder: “In their early childhood, Warren was not generous with his children. He would sometimes tease them with money, dangling it in front of them and then snatching it away. The Buffets… withheld money from their children in such an extreme manner that the children felt deprived… Warren used to say that he was not going to let his children inherit anything—or only a token amount. He has softened on that stance over time and his children know they’re getting something, but it’s not certain how much. So there’s a little bit of dangling of the money still going on.”
Wikipedia puts it more flatteringly, “His children will not inherit a significant proportion of his wealth. This is consistent with statements he has made in the past indicating his opposition to the transfer of great fortunes from one generation to the next.” The question is, which came first? Was the belief the cause of the decision not to make a significant bequest to his children, or was the belief constructed to justify it?
In 2006 Warren Buffett disowned his son Peter’s daughter by an earlier marriage, Nicole, after she participated in a documentary about the growing wealth gap in the US. “Although his first wife had referred to Nicole as one of her ‘adored grandchildren’, Buffett wrote her a letter stating, ‘I have not emotionally or legally adopted you as a grandchild, nor have the rest of my family adopted you as a niece or a cousin.’” (Wikipedia.)
In introducing her programme, Mary Ann Sieghart says, “Warren Buffett is one of the richest men in the world. He’s worth $39 billion…”. One wonders whether or what Ms Sieghart thought about that word, ‘worth’, before writing it in her script. Given that this is an (excellent) documentary and not an op-ed piece, I assume she was unconsciously articulating the widely held belief in the west (and much of the east and everywhere else) that money is, indeed, the measure of a person’s worth.
The problem is that, for some there is never enough. Because money isn’t that love and affection, no amount of it will satisfy. This is why, I believe, Buffett didn’t turn to philanthropy until well into his seventies when there was no risk whatever that he might lose a substantial sum of money, and he could afford, at last, to turn his attention to some more useful measure of worth.
(Although one shouldn’t discount an alternative or parallel explanation, which is that guilt at being so ungenerous throughout his life was catching up on him.)
Sieghart observes, “His extraordinary mathematical brain and his determination to disregard conventional opinion have earned him an almost cultlike following”. It would be good to know, also, how thoughtfully Sieghart used the word ‘determination’. After all, someone who is determined to buck convention sounds like someone who is determined to be right, who has a need to be right irrespective of whether they are actually right on any particular occasion. Being so clever, I guess he was often right: that’s not the point.
And then there is the “almost cultlike following”: someone for whom the AGM of his investment company, Berkshire Hathaway, is the high spot of his life.
(Incidentally, I am not attempting to paint a picture of an unhappy person, or one whose life is in any way unsatisfactory to him. Apparently, he used to tap dance his way to work because he was so happy and, according to Alice Schroeder: “He has said that he eats the things which he liked when he was three years old [note the age]”, and why wouldn’t you have a lollipop for breakfast if you wanted to?)
But it does seem that Buffett is someone who gains a lot of happiness from making yet more money and adding to the pile.
Buffett provides an illustration, albeit an extreme one, of the individual who, at an early age, feels a lack of love or even a lack of “what passed for affection in their household”. Someone who saw money as a simulacrum for the love and affection that he lacked. Someone a long way from the naive picture painted in the Economist’s review of Schroeder’s book: “The broad outline of Mr Buffett’s story is widely known. Like many shy small boys, he liked collecting, categorising and measuring things. Money was just another way of keeping score.” And some.
Extreme illustrations are useful because they show clearly tendencies, attributes and characteristics which might be so muted in others that they go unnoticed, and therefore not recognised as the causes of difficulties and unhappiness.
I suggest that Buffett is the embodiment of what’s unhelpful in business generally. The adoration of money and its accumulation is a pathological trait in a society which is increasingly dissociated and fragmented, where people are denied “what passes for affection in their household”, not least because they are unable to give it.
by Jeremy Marchant . last updated 10 june 2015 . image: Free images