IndexWarren Buffett's childhoodThe education of Warren BuffettThe beginnings of Warren Buffett's professional careerWarren Buffett's career from the 1990s to today.Key leadership traits of Buffett Willingness to learn Ability to go against the grain Being humble despite his Fortune Buffett's willingness to give Author Takeaways Conclusion Warren Buffett will likely become the most influential and successful investor in history. Buffett has shown the world how patience pays off. This patience, along with hard work and his training in the financial industry, has allowed Buffett to become one of the richest men in the world with a net worth of $87.6 billion. Of course, with a net worth and track record like Buffett, there have been many books and documentaries made about him detailing his life and successes in addition to the annual speeches he gives to many aspiring investors at his Value Investors Conference in his hometown of Omaha, Nebraska. This article explores the life and leadership of Warren Buffett and how that made him who he is today. Who is Warren Buffett? Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original Essay For several years, the question “who is Warren Buffett” has been a legitimate question to ask. The average person would probably only be able to tell you that Buffett is a wealthy Wall Street billionaire. Investing in nerds, like me, would ensure you understand that that's not all there is to it. Buffett is what every investor dreams of becoming. While many self-proclaimed "Wall Street insiders" have claimed they can help you find magical stocks that double overnight and go with the flow of the market, over Buffett's lifetime, he has quietly built a staggering fortune." being greedy when others are fearful, and fearful when others are greedy.” Today, Warren Buffet is currently the third richest man in the world behind Jeff Bezos and Bill Gates. He achieved this wealth by investing in companies priced close to value of their company, but with exponential growth potential. He manages the transactions of these investments through the company of which he is president, Berkshire Hathaway, based in Omaha, Nebraska, is a diversified company 2016, the company posted an average annual gain of 19%, while the Standard & Poor's 500 market index, also known as the S&P 500, posted an average annual gain of 9.7% over the same period from 1965 to 2016. Needless to say, the company has been very successful under Buffett's leadership. While making a profit is always important in business, especially when your company's business is to make money, Buffett isn't as obsessed with money as many might think. Since the turn of the century, we have seen how generous Buffett is as a philanthropist. In 2010, Warren Buffet announced that he would pledge, "More than 99% of his wealth will go to philanthropy during his lifetime or at his death," in response to "The Giving Pledge" campaign by his friends, Bill and Melinda Gates. This was in addition to his 2006 pledge to gradually donate all of his Berkshire Hathaway shares to charitable organizations. Since then, the campaign has expanded to the point where several billionaires have pledged to donate 50% of their fortunes to charitable organizations and causes. Warren Buffett's Childhood Path Although his father was a congressman for the state of Nebraska, Warren Buffett's fortune is more of self-made wealth than inherited wealth. According to a Forbes article byJane Levere, you could say Buffett's wealth began when he was seven years old and picked up a book called One Thousand Ways to Make $1000 (2017). This book inspired Buffett to start putting what he read into practice. Buffett's childhood activities included selling chewing gum, bottles of Coca-Cola, and home deliveries of newspapers and magazines on paper routes. Buffett's activities took a brief hiatus when his father, Howard Buffett, announced that he had lost his job at the local bank due to the Great Depression. Later in Hagstrom's The Warren Buffet Way, we read where Buffett's grandfather essentially bailed out the Buffett family with his grocery store funds. This led Howard Buffett to get a job at a stock brokerage firm, a place where a young Warren Buffett wandered looking for clues about how the markets worked. In 1941, at the age of eleven, Buffett purchased six shares of Cities Services, the first of many shares he would purchase over the course of his life. Warren Buffett's Education While he was graduating high school, Buffett was urged by his father, Howard, to attend college at the prominent Wharton School of Finance and Commerce at the University of Pennsylvania in Philadelphia. Not long after, Buffett dropped out of Wharton, because he learned nothing from the professors, and moved closer to home to the University of Nebraska at Lincoln. In just one year at the University of Nebraska, Buffett graduated and returned to his hometown of Omaha. It was there that he would find the next book that would change his life: The Intelligent Investor. This book had reignited Buffett's passion for investing and he began looking for graduate schools to attend to improve his knowledge of the world of investing since the previous institutions he had attended failed to do so. His first choice was the prestigious Harvard Business School. Believe it or not, however, Buffett was denied admission. Shortly thereafter, Buffett learned that the author of his favorite new book, Benjamin Graham, was actually a professor at Columbia University Graduate School of Business. This is where Warren Buffett learned much of his investing education and became the genius he is known as today. Buffett would state many times that most of what he learned about investing came from Graham. One of Graham's famous lines that still resonates today is: “There are two rules of investing. The first rule is "Don't lose". The second rule is: "Don't forget the first rule." One can only imagine that it was simple but powerful lessons like these that taught the young Buffett to remember how it is always better to sell a stock early and miss a big profit than to hold a stock too long and suffer a huge loss . . Graham and Buffett quickly develop a strong mentor-student relationship, and Buffett will receive the first A+ Graham would give him as a professor. Warren Buffett's Early Professional CareerAfter graduating from Columbia University, Buffett had the opportunity to work with Benjamin Graham at his brokerage Graham-Newman. However, soon afterward Graham retired and the company was dissolved. Taking what he had learned from his experience at the brokerage, in 1956, he returned home and started his own business: the Buffett Partnership Ltd. Warren Buffett was fortunate to have friends and family who assisted him in starting his business by contributing with $105,000 dollars. . With this money, he invested some of it in stocks and used the other part to add more partnerships to his arsenal. In just two years after moving home in 1958, he doubled his members' contributions.In the 1960s, Buffett had the opportunity to further increase his partners' profits when American Express, among other banks, felt the impact of what is known as the "salad dressing scandal." American Express' stock price lost more than 50% of its value. This is when Buffett saw the door to an opportunity. After gathering consumer opinions about the company by asking people's opinions, Buffett invested $13 million in the company: Buffett was demonstrating how to be greedy when others were fearful. As you can imagine how most of his investments turn out, this was a very profitable move on Buffett's part resulting in a $20 million profit in the two years following the purchase. Not long after, Buffett came across a textile mill in New England called Berkshire Hathaway and purchased a significant amount of stock in the company. Contrary to what you might think, Buffett called this investment one of the worst he has ever made. Regardless, the size of the investment Buffett purchased made him a majority shareholder of the company. This effectively meant that Buffett ran Berkshire Hathaway and Buffett Partnership Ltd. As the majority shareholder, Buffett instructed Berkshire Hathaway to acquire National Indemnity Insurance due to Berkshire's slow decline in cotton sales on a year-over-year basis. Buffett, like many other businessmen, liked the insurance business because it provided him with a steady monthly income with few incidents in which he would have to pay clients large sums of money. In 1968, The Buffett Partnership Ltd. had its most successful year with $40 million in profit. The following year, however, Warren Buffett terminates his partnership and liquidates all of his assets associated with The Buffett Partnership Ltd. Buffett, who still controls Berkshire Hathaway as the majority shareholder, appoints himself as the company's president. Buffett continues to make the company – originally a textile factory – more money from its investments, banking and insurance than from its sales in the 1970s. However, the honeymoon phase was not to last. From 1973 to 1974, the stock market began to slide and with it came Berkshire Hathaway and Warren Buffett's portfolio. It is also important to note later that during this time frame Buffett began buying shares of the Washington Post. However, this brief bear market – a term used by investors to indicate an overall decline in stocks – caused Warren Buffett's personal wealth to decline by 50%. As you may have already guessed, this didn't stop Buffett. This setback was just another obstacle to overcome. He and his family survived and thrived after the Great Depression, and Buffett was willing to put aside his emotions of economic insecurity to overcome this challenge as well. After a few successful years of buying and selling stocks, Warren Buffett had taken Berkshire Hathaway to new heights as the company's stock was trading at a whopping $290 per share. However, as being the majority shareholder and chairman of Berkshire increased his personal wealth to approximately $140 million, Buffett realized the importance of reinvesting the funds in the company and allowed himself to take home only an annual salary of 50,000 dollars. Thanks to Buffett's knowledge of how the journalism business works, Berkshire Hathaway began buying shares of American Broadcasting Companies - yes, the ABC news station. Later in 1985, Buffett would be a key facilitator in the takeover byCapital Cities Communications of the American broadcasting companies. This was a very important event for the American public as it was the largest merger of two companies at the time. Buffett's involvement in the merger granted him three million shares of the new company and the title of director as a member of the company's board of directors. Warren Buffett's career from the 1990s to today. According to Hagstrom, in 1994, Berkshire Hathaway informed its shareholders that the company was the majority shareholder of the insurance company GEICO. In 1996, Berkshire purchased the remaining outstanding shares to become the entire owner of GEICO for $2.3 billion. This move was highly ridiculed due to the company's poor performance in the 1970s, when the company faced bankruptcy. However, today we know that this acquisition was a very profitable venture for Buffett, Berkshire and its investors. In Berkshire Hathaway's 2013 10-K financial statement, we read that GEICO earned $1.8 billion in premiums alone. In 2003, Berkshire Hathaway acquired a company originally from West Tennessee: Clayton Homes. Clayton Homes, founded by Jim Clayton of Finger, Tennessee, was originally a home construction company. By 1983, when the company went public on the New York Stock Exchange, the company had added a manufacturing and mortgage division to the business. For $1.7 billion, Warren Buffett, impressed with both the owner and the company, added the company to Berkshires control where it has remained ever since. Although everything listed does not include all the important events in Buffett's life, these above-mentioned events can help us see his leadership style. Key Leadership Traits of Buffett In this section, one can reasonably come to the conclusion of Warren Buffett's leadership style based on his character traits, events in his life, and interpretation of leadership styles based on past research. Willingness to Learn One assumption anyone can make about anyone attending the Wharton School of Business or Columbia University is that the individual is knowledgeable. Based on his history, we are certainly right in assuming that Warren Buffett is an intelligent person. However, Buffett obviously wasn't born with the God-given gift of picking winning stocks. Buffett used his resources to learn as much as possible. As mentioned above, Buffett says that certain books are what put him on the path to becoming the investor he is today. If he had never read The Intelligent Investor, Buffett would never have opened his eyes to Benjamin Graham's stock market valuation. He also wouldn't have known to apply to Columbia to take his graduate school classes. Of course, if he hadn't read A Thousand Ways to Make $1,000, he might not have had the entrepreneurial drive to attend college to earn a business degree. Ability to go against the grain If Buffett's quote of "Be greedy when others are fearful, and fearful when others are greedy," hasn't convinced you of this, then you don't know Buffett. On several occasions during the beginning of his investment career, Buffett was told how crazy he was for buying or selling large amounts of shares of certain companies. However, in every circumstance, Buffett was willing and able to ignore the outside noise and listen to his proven guidelines in the make these decisions. For example, when the economy entered bear markets and several investors got scared and decided to sell the stocks they had, Warren Buffett was not fazed by the sell-off untilthe companies he owned were still on the right track. Sometimes, on these occasions, Buffett was willing to buy more shares because they were available at a “discounted price.” Being Humble Despite His Fortune As stated earlier, Warren Buffett is the third richest billionaire in the world. So, why don't most people know much about him compared to people like Jeff Bezos, Bill Gates, and Mark Zuckerberg? Aside from the fact that he probably uses other guys' businesses more often than Buffett's, I'd attribute that to his inspiring humility. It's a fairly well-known fact that Buffett is thrifty with his money. For example, he has lived since 1957 in the same five-bedroom house in Omaha that he purchased for $31,500. Additionally, The Buffett Partnership Ltd., and eventually Berkshire Hathaway, have shared the same lackluster building where Buffett's office has resided from 1962 to the present. Of course, many people today, myself included, can only imagine what it would be like to have a million dollars, much less a billion. It's easy for us to criticize Buffett for not buying a bigger house, a bigger office building, or at least a couple of really fast, expensive cars. However, it is easy for Buffett to criticize us because we are foolish and think it is better to spend that fancy money on luxury than to invest that money to grow and work for us. Furthermore, it is well known that Buffett does not invest in what he does not understand. In other words, Buffett would rather buy McDonald's stock than a semiconductor computer chip company, because he believes he understands the business of selling food products much more easily than the business of the technology industry. I think it's easy to see why Buffett's level of humility is something we should strive to match. Buffett's Willingness to Give As previously mentioned, Buffett knows what it's like to have little to no money and has given back to numerous charities because of this. For many people, it's easy to assume that it's not that difficult to donate money to charities when you have billions of dollars. This is an unfortunate and misguided mindset. If Warren Buffett simply donated his wealth to charitable foundations for recognition, he most likely wouldn't still be working. However, it is important to remember that in 2010 Buffett pledged to donate 99% of his wealth to philanthropic causes during his lifetime or upon death. Doing this means he will not allow his children and grandchildren to inherit billions of dollars without having to work their entire lives. Furthermore, the fact that he is still working means that he is trying his best to increase his wealth so that he can donate as much money as possible to charitable foundations rather than his current state of wealth. Conclusion on Buffett's leadership style. Keeping the above-mentioned characteristics and previous research in mind, I have come to the conclusion that Buffett is a transformational leader. Warren Buffett is a leader who gives his best in the workplace every day. He also expects the best from his employees. However, while Buffett can expect efficiency, he also wants to know the opinions of his employees for the contribution they can make to his research. Furthermore, Buffett is not the type of leader who claims to be in charge and knows everything. Buffett is willing to admit when he is wrong and when he doesn't know something. Warren Buffett is also someone who puts others first. Buffett believes that the owners of the company are the shareholders, not the employees, the board of directors or the presidents. Believing in this, Buffett not only generously gives himself, but in 1981 allows investors to donate $2 a.