How to Stay Out of Debt: Warren Buffett – Financial Future of American Youth (1999)

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Buffett became a billionaire on paper when Berkshire Hathaway began selling class A shares on May 29, 1990, when the market closed at $7,175 a share. In 1998, in an unusual move, he acquired General Re (Gen Re) for stock. In 2002, Buffett became involved with Maurice R. Greenberg at AIG, with General Re providing reinsurance. On March 15, 2005, AIG’s board forced Greenberg to resign from his post as Chairman and CEO under the shadow of criticism from Eliot Spitzer, former attorney general of the state of New York. On February 9, 2006, AIG and the New York State Attorney General’s office agreed to a settlement in which AIG would pay a fine of $1.6 billion. In 2010, the federal government settled with Berkshire Hathaway for $92 million in return for the firm avoiding prosecution in an AIG fraud scheme, and undergoing ‘corporate governance concessions’.

In 2002, Buffett entered in $11 billion worth of forward contracts to deliver U.S. dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion. In 2006, Buffett announced in June that he gradually would give away 85% of his Berkshire holdings to five foundations in annual gifts of stock, starting in July 2006. The largest contribution would go to the Bill and Melinda Gates Foundation.[37] In 2007, in a letter to shareholders, Buffett announced that he was looking for a younger successor, or perhaps successors, to run his investment business.[38] Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.

Buffett ran into criticism[39] during the subprime crisis of 2007–2008, part of the late 2000s recession, that he had allocated capital too early resulting in suboptimal deals. “Buy American. I am.” he wrote for an opinion piece published in the New York Times in 2008.[40] Buffett has called the 2007–present downturn in the financial sector “poetic justice”.[41] Buffett’s Berkshire Hathaway suffered a 77% drop in earnings during Q3 2008 and several of his recent deals appear to be running into large mark-to-market losses.[42]

Berkshire Hathaway acquired 10% perpetual preferred stock of Goldman Sachs.[43] Some of Buffett’s Index put options (European exercise at expiry only) that he wrote (sold) are currently running around $6.73 billion mark-to-market losses.[44] The scale of the potential loss prompted the SEC to demand that Berkshire produce, “a more robust disclosure” of factors used to value the contracts.[44] Buffett also helped Dow Chemical pay for its $18.8 billion takeover of Rohm & Haas. He thus became the single largest shareholder in the enlarged group with his Berkshire Hathaway, which provided $3 billion, underlining his instrumental role during the current crisis in debt and equity markets.[45]

In 2008, Buffett became the richest man in the world, with a total net worth estimated at $62 billion[46] by Forbes and at $58 billion[47] by Yahoo, dethroning Bill Gates, who had been number one on the Forbes list for 13 consecutive years.[48] In 2009, Gates regained the position of number one on the Forbes list, with Buffett second. Their values have dropped to $40 billion and $37 billion, respectively, Buffett having lost $25 billion in 12 months during 2008/2009, according to Forbes.[49]

In October 2008, the media reported that Warren Buffett had agreed to buy General Electric (GE) preferred stock.[50] The operation included extra special incentives: he received an option to buy 3 billion GE at $22.25 in the next five years, and also received a 10% dividend (callable within three years). In February 2009, Buffett sold some of the Procter & Gamble Co, and Johnson & Johnson shares from his portfolio.[51]

In addition to suggestions of mistiming, questions have been raised as to the wisdom in keeping some of Berkshire’s major holdings, including The Coca-Cola Company (NYSE:KO) which in 1998 peaked at $86. Buffett discussed the difficulties of knowing when to sell in the company’s 2004 annual report:

That may seem easy to do when one looks through an always-clean, rear-view mirror. Unfortunately, however, it’s the windshield through which investors must peer, and that glass is invariably fogged.

http://en.wikipedia.org/wiki/Warren_Buffett

Comments

TheDystopiaInside says:

The big thing that helped me put aside a good chunk of savings was
essentially despising the society I live in and not wanting 99% of what
it’s offering.

Pat Ellis says:

There is a professional stock tips investment guide with charting for
anyone looking for good investments on http://ow.ly/Jc5Oe

Max Willson says:

How did I miss this guy! What a smart man! 

Michel Cormier says:

The truth is, no one is special or different than anyone else, No one is
special, and everyone is special. Life has to be balanced to be faire. page
87 of the Present.

If you seek a way out of debt, gogole truth contest and you’ll see it all
very clearly.

pjamesbda says:

“The amount of poverty and suffering required for the emergence of a
Rockefeller, and the amount of depravity that the accumulation of a fortune
of such magnitude entails, are left out of the picture, and it is not
always possible to make the people in general see this.”
-Che Guevara

Leti Renee says:

It is a great and unmeasurable thing to share knowledge to complete
strangers for free. (this event may not have been completely free…but he
has shared this many times before)

Mark G says:

Debt should be avoided…people need to live below ones means to build
wealth.

Greg Anderson says:

Interesting for someone at the front end of their career.

Frankincensed says:

The concern here is not to be jealous or small-minded about wealth, or Mr.
Buffett’s in particular, but to learn how to be financially independent.
Sad that most people either hate Buffett for all the wrong reasons or love
him for the same. It’s not about being jealous, envious, or angry, but
rather how to set your wealth so that you have enough so that you are
financially independent, neither being dependent on family-friends or
government. Sad that 90% retire in this situation. Think about where our
country would be if education focused on personal finance (how to develop
it and maintain it through the working years to retirement) as well as
public finance or an understanding of economics and how to make our govt.
responsible and accountable to its citizens. 

Jamie Mac says:

Warren is a very wise old man and I am sure he was always a wise man,
unlike so many other old men, age does not equal wisdom.

Andres Anaya says:

God bless you Mr. Buffett. Your humility and humanity speak larger than any
combination of words could ever express.

jsteed5 says:

I do not understand debt. I have never had debt, even when I was a student
living in the wet, smelly basement of some student boarding house and
paying my own way. Balancing your bank account is the easiest
task conceivable. Easier than breathing! Simple MATH! If you want more than
your can afford, then you are greedy, or just plain stupid. There is no
excuse for debt, but I keep hearing all the BS about NEEDS! Yeah right!
Gotta have that iPad, or iCrap, that big fucking screen TV, the designer
clothes, etc, etc ….

Randy Taylor says:

I had a job at a Scheels sporting goods store in Rapid City, SD back in
1997. Warren walked in the store all by himself looking for ski boots.
Knowing he was a billionaire, I showed him our very best ski boots… He
quickly shut me down and asked what was on sale. I sold him the sale
priced boots… and as we were walking to the cashier he said this to me…
“Son, just because something is the most expensive, doesn’t mean its the
best” 

Malcolm Urlich says:

And soon Buffett may lose all his wealth in just 7 days or so, he uses
narratives that convince (dupe) suckers into taking his advice, if it
fails, he is not held accountable, now is he? He has been in a successful
cycle for quite some time, however, his time will come and no doubt he may
crash financially? he got lucky that is the “cause” of his financial
success, what “contributes” to his success are his skills and innate
talents! We don’t hear from those who staretd out at the same time as
Buffett, took the exact, precise same steps and measures as Buffett
and….failed miserably, it’s called “Survivorship Bias- we listen to the
winners (such as Buffett) and we forget about the losers (those that did
what Buffett did and failed). Now he says he looks for those with 3
qualities-Integrity, intelligence and energy, this misleading advice
implies that those with such skills/talents are the measures that will
secure success in the banking/finance industry, however, their are those
who had or have these qualities and have failed in the banking/finance
industry, success comes down to “lady luck” (the cause) and skills/talent
are needed (the contributors) as well!

as varun says:

may be warren buffets strategies help him the most rather than anyone else
or else everyone would have become billionares by now.he really is destined
for greatness and many are not thats how the way the world works where
everything is predestined.

MoneyZone says:

I feel bad for young people that don’t have control over
their credit card debt. Here’s what the Billionaire Mr.Warren Buffett has
to say on this subject and more…Like how to become RICH!.
How to Stay Out of Debt: Warren Buffett – Financial Future
of American Youth.
#money
https://youtu.be/IvveZr0D_9Y

m clark says:

Wow, Thanks Mr Warren

Fabio Barone says:

Just a warning: the sub-titles are not accurate, certainly not for the
first 5 mins of the video, which is what I have seen so far.

Tuan Do says:

“Oh it’s one o’clock now and I wish you well, I have to go and make another
billion before dinner.”

Nakor Z says:

He started out sounding pretty smart, but quickly developed into a morbidly
typical representation of baby-boomer patriotic idiocy. Well, I guess it’s
just a generational gap; the shit he said about technology as if it was
some revelation was almost laughable.

And someone should have asked him if he would have been as successful or
rich if he’d followed the same guidelines for success – a college education
& job – that he’s recommending to all of them. This is classic marketing
scam-talk; get rich doing X, meanwhile we’ll get rich from you doing X for
us! 

Josh Vonhauger says:

How to stay out of Debt 

Sharon goodwin says:

Good Suff!

Bauss says:

great..

rowdy yeats says:

See, this is “communism, done right”.
Berkshire Hathaway Inc., acquires all these companies,
and then the majority of the shares of Berkshire Hathaway
are handed over to quasi-governmental non-profit organizations
such as The Bill and Melinda Gates Foundation.
If owners of private property desire to “socialize” their holdings,
well, it is their right to do so. The important thing is that nobody
threatened them with violence, e.g. held a gun to them, like in
Stalinistic Russia, and forced them to “nationalize their holdings”.
For it is written, Thou shalt not covet (any thing that is thy neighbour’s).
Also, it is written, Thou shalt not steal… Wherefore, you may covet your
enemy’s land holdings, but really, you have to wait for them, or their
descendants, to hand over their “concerns” willingly, “for the social good”.
For that, is what Love would do, right?
..”C’mon, monopoly guy, how much is enough?”

Glen Suchitha says:

60 mins of pure gold

Keland Busby says:

@GCLwins: Highly agreed. It is always better to own than to make payments
or borrow. 

CA Nunerley IV says:

How to Stay Out of Debt: Warren Buffett – Financi…:
http://youtu.be/IvveZr0D_9Y

József Vass says:

What initial sum would i want from WB if he would take 10% royalty on
future earnings? Obviously enough so that I would not have to worry about
making money for the rest of my life. Say 3 million dollars.

SerpentInside says:

Bullshit. There is a huge difference between great wealth and beeing poor.
There is a inherent safety in having a great and diversified wealth. Beeing
in a poor class, especially today is to have constant anxiety. That has a
HUGE impact on quality of life Warren. You must understand this phenomenon.

Ymous Anon says:

How to stay out of debt. For starters put bloodsuckers like Warren Buffet
in prison and spread his ill gotten gains out evenly to we the people. who
unlike you bloodsuckers haven’t done an honest days work in your lives.
that goes for you phony hip billionaires like mark cuban, richard branson,
et al

Kev Mehl says:

This is the crux of student financial debt…hello Elizabeth Warren,

Stacy Serrano says:

awesome video!!!

Steen Qvist says:

Utroligt med gode råd til især ungdommen men vi andre kan også godt prøve
at følge det. Han klarer detc flydende helt uden manuscipt

Vanessa K says:

I wished he had answered the first question asked from an audience member.
I believe that the young girl was asking for how to make smart financial
decisions if you do not have a huge salary. He seemed to have thought that
she was asking how differently people who make less money will live in
comparisant to those that make a lot of money.
I do beleive that the answer should be to acquire assests no matter how
small to start. But I would have liked to have heard it from WB. He does
have some other great videos to watch for advice.

clay smith says:

wonderful presentation. mr buffet 

Brian Christohper says:

The truth is let Obama use your name and never pay your taxes without going
to jail and you are fine Buffett plays get rich with the tax payers $$$$
by not paying his owed taxes What a hypocrite


Roham says:

23:45 Warren Buffett calls America a company, not a country.

UK Local Accountants says:

Great lecture from the one and only Mr. Buffett

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