The frugal life of Warren Buffett: How the billionaire spends his fortune, from McDonald’s breakfasts to a rare and ‘indefensible’ splurge

Buffett loves playing bridge, sometimes playing for over 8 hours a week, the Washington Post reported. He also likes to hit the green for some golf, spends a great deal of his time reading, and loves to play the ukulele — he said in 2020 that he has a collection of 22 ukuleles. He’s played the ukulele since he was young and used his skills to court his first wife Susan, their son Peter once told NPR.

Buffett once bought and donated 17 Hilo ukuleles to the North Omaha branch of the nonprofit Girls Inc, and showed up at the group’s building to give a group lesson.

The vast majority of Buffett’s net worth is tied to Berkshire Hathaway, his publicly traded holding and investment company. Buffett owns about 38% of the company’s Class A shares and less than 0.001% of Class B shares, according to the Bloomberg Billionaires index.

Berkshire Hathaway itself owns over $1 trillion in assets, Insider previously reported.

The CEO of Berkshire Hathaway began building his wealth by investing in the stock market at age 11, according to Forbes, and first filed his taxes at the age of 13. As a teenager, he was raking in about $175 a month by delivering The Washington Post — more than his teachers (and most adults). He also sold calendars, used golf balls, and stamps. He had amassed the equivalent of $53,000 by the time he was just 16.

The vast majority of Buffett’s wealth was earned after his 50th birthday. His salary at Berkshire Hathaway last year was just $100,000, the same as it’s been the last 40 years, and he reimbursed the company $50,000 in part to cover his personal calls and postage. The company spent triple Buffett’s yearly salary — $301, 589 — on his personal and home security last year, according ot the company’s proxy statement.

Buffett’s greatest investment mistake is said to be a Sinclair gas station that he bought in 1951 at the age of 21 — he bought a stake in the station with a friend, and the business was consistently outsold by the larger Texaco station opposite it. He eventually lost the $2,000 he invested out of his total net wealth of $10,000 at the time, Yahoo Finance reported, referencing Glen Arnold’s book “The Deals of Warren Buffett, Volume 1: The First $100M.” 

Buffett married his first wife, Susan Buffett, in 1952. Together they had three children: Susie, Howard, and Peter. Though he and Susan remained married until Susan’s death in 2004, they had lived apart since the 1970s. He married his second wife and longtime companion, Astrid Menks, in 2006.

When Susie was born, Buffett apparently turned a dresser drawer into a bassinet for her to sleep in, according to Roger Lowenstein’s 2008 biography of the billionaire. For his second child, Howard, he borrowed a crib.

Despite his multibillionaire status, Buffett has long lived a relatively modest and frugal lifestyle. He previously told CNBC and Yahoo Finance’s “Off the Cuff” that he’s “never had any great desire to have multiple houses and all kinds of things and multiple cars.”

Buffett lives in a modest home in Omaha, Nebraska, which he once called the “third-best investment” he’s ever made in a letter to Berkshire shareholders. He bought the home for $31,500 in 1958 — adjusted for inflation, that’s about $276,700. The house is now worth an estimated $1.3 million, according to Zillow, and spans 6,280 square feet with five bedrooms and 2.5 bathrooms.

Buffett has made some security upgrades since buying it as he became famously wealthy. The home is now guarded by fences and security cameras.

In 1971, Buffett purchased a vacation home in Laguna Beach, California, for $150,000. Part of a gated community called Emerald Bay, the house has six bedrooms, is walking distance from the beach, and was renovated after Buffett’s initial purchase. 

He initially put it on the market in early 2017 for $11 million, then cut the price down to $3 million later that year. It sold in October 2018 for $7.5 million, after almost two years on the market. 

Unlike many other ultra-wealthy individuals, Buffett has long driven a fairly modest set of wheels. He previously drove a 2001 Lincoln Town Car with a license plate that read “THRIFTY” for about a decade, before auctioning it off for charity and replacing it with a 2006 Cadillac DTS. In 2014, he replaced the DTS with a Cadillac XTS, according to Forbes.

“The truth is, I only drive about 3,500 miles a year so I will buy a new car very infrequently,” Buffett once told Forbes.

One splurge Buffett has made is on a private jet. Buffett spent $850,000 on a used Falcon 20 jet in 1986, then sold the first jet and upgraded to a different used jet in 1989, spending $6.7 million. He and business partner Charlie Munger nicknamed the second jet “The Indefensible,” Buffett revealed in a letter to shareholders.

Despite the fact that Berkshire Hathaway is a major Apple shareholder, Buffett didn’t upgrade to a smart phone until 2020. Before that he preferred the Samsung SCH-U320, which can be bought on eBay for under $20. Though he did make the switch to an iPhone eventually, he told CNBC that he just uses it “as a phone.”

Buffett has said he has about 20 suits, all made in China by designer Madame Li, according to CNBC. He has a longstanding friendship with Li, an entrepreneur who worked her way up in the business. He’s gotten the same $18 hair cut for years from a barber shop in the same building as his office.

Buffett once told Fortune that he eats “like a six-year-old.” He gets his breakfast at McDonald’s almost every morning on the way to work. In 2017, he was spending no more than $3.17 on his order, paying with exact change, he said in the HBO documentary “Becoming Warren Buffet.” He also drinks an alarming amount of Coca-Cola — he’s said he drinks at least 5 servings every day.

Buffett once went to McDonald’s in Hong Kong with longtime friend Bill Gates and paid with coupons, Gates reminisced in his 2017 annual letter.

The letter reads: “Remember the laugh we had when we traveled together to Hong Kong and decided to get lunch at McDonald’s? You offered to pay, dug into your pocket, and pulled out…coupons!”

Gates has described Buffett as a “thoughtful and kind” friend, and has said that every time he visits Omaha, Buffett drives to the airport to pick him up.

Warren Buffett is considered one of the world’s most generous philanthropists. He pledged in 2006 to donate about 85% of his nearly 475,000 Berkshire Class A shares to five foundations: the Bill & Melinda Gates Foundation, the Susan Thompson Buffett Foundation (named for his late wife), and three foundations run by his three children.

He teamed up with Bill and Melinda Gates in 2010 to form The Giving Pledge, an initiative that asks the world’s wealthiest people to dedicate the majority of their wealth to philanthropy. Buffett himself has pledged that 99% of his wealth will go to philanthropy during his lifetime or upon his death.

As of 2023, the shares he’s already given away were worth about $50 billion based on their value at the time of donation, or about $130 billion given Berkshire Hathaway’s current stock value. If Buffett had kept those shares rather than donating them, he’d likely be the world’s wealthiest person with a net worth of around $250 billion, Insider previously reported. 

Buffett plans on leaving his kids $2 billion each, the Washington Post reported in 2014. He once in a letter to shareholders that he recommends that super-wealthy families “leave the children enough so that they can do anything but not enough that they can do nothing.”

“There are things money can’t buy,” Buffett once said at a shareholder’s meeting. “I don’t think standard of living equates with cost of living beyond a certain point. My life couldn’t be happier. In fact, it’d be worse if I had six or eight houses. So, I have everything I need to have, and I don’t need any more because it doesn’t make a difference after a point.”