Lesson from a young Warren Buffett

At the tender age of 11, Warren Buffet invested in his first ever stock. Buffett bought six shares of Cities Service preferred stock for $38 per share. The stock fell to $27 a share shortly thereafter. The shares eventually bounced back to $40 a share. Buffett sold the stock at that point for a nice $3 per share profit. Not too shabby…right?

Not long after Buffet sold his shares in Cities Service, their stock price jumped to $200 per share! Buffet could have made 426% on his initial investment if he had stuck with it. This experience taught Buffett a valuable lesson which he would carry with him the rest of his life.

What lesson is to be learned here? Teach your children about personal finance and investing at a young age. What they learn about money when they are young will help set them up for great success for the future. It will be the best investment you ever make.


12 thoughts on “Lesson from a young Warren Buffett

  1. Great post. Yes, parents should teach their children about personal finance. Also, schools should start teaching it in order to better prepare students to deal with real life decisions.

    • I agree completely. The educational system we have in place doesn’t really teach children about finances and money and doesn’t prepare them for the real world in general. Thanks for the comment!

      • What I found even more interesting, or perhaps ironic was that even when I went to college personal finance was just once class you could choose as an elective, rather than making it mandatory. No wonder we get in so much trouble and debt:-)

      • Same situation here; The option to take a personal finance class was there, but younger people just don’t seem to care. It’s unfortunate because school helps prepare people to for jobs but it doesn’t prepare them for all the responsibilities that come with being an adult.

      • You are right, and that is why trouble is just around the corner. I saw a show about a year or so ago, I forgot the name, and there was this couple that together made 200k, but they were in debt, by how much? 180k. I just could not believe it.

      • I was too:-) One thing I found quite surprising too was the time I was doing a background check on prospective tenants, and do you know what I found out? The ones that showed up to see the house in expensive cars had the worst credit score while those driving inexpensive cars or clunckers faired much better.

      • Oh I believe it. I actually recently just finished reading “The Millionaire Next Door” and it illustrated those very same observations you notice. Society would have you believe millionaires are the ones who drive the expensive cars and live in the big fancy houses but the truth is that those people have very little actually saved up. True millionaires live well below what they earn and don’t spend money on those unnecessary luxeries.

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