Early Buffett Investors Doing Well
OMAHA, Neb. (AP) _ Robert Soener used a $10,000 work bonus back in the 1950s to invest in Warren Buffett’s abilities to buy stock.
Now Soener holds millions of dollars worth of stock in the investment wizard’s Berkshire Hathaway Inc., and he is giving a good deal of money away to charities.
Soener is among at least 16 people still living in Omaha who invested in limited partnerships with Buffett in the 1950s and 1960s, the Omaha World-Herald reported Sunday. Those who kept their money with Buffett when he formed Berkshire Hathaway have grown rich, and many are sharing their wealth through charities.
Leland and Dorothy Olson live in a one-story home near a high school. It has been their address for 45 years. They also have given millions to the University of Nebraska Medical Center and other charities.
Olson said their lifestyle is about the same as if he had never invested with Buffett. ``I’d probably live in the same house,″ said Olson, a retired obstetrician. ``I just wouldn’t be giving away a lot of money.″
During the first 10 years of Buffett’s first investment partnership (from 1957, the first full year of the partnership, through 1966) it earned a total return of 1,156 percent, nearly 10 times the return of the Dow Jones industrial average.
Buffett ended the partnerships in 1970, but some of Buffett’s early partners kept their money in Berkshire, Buffett’s new investment vehicle, which has continued to thrash stock-market averages.
Known for buying stock in companies he knows and holding onto that stock, Buffett is a multibillionaire and among the richest men in the world. He lives modestly, driving a 1991 Lincoln Town Car and living in the same house he bought for $31,500 in 1958.
The tax return for his Buffett Foundation listed charitable contributions of nearly $10 million in the 12 months ended June 30, 1997. Buffett has said the foundation will be the recipient of the bulk of his fortune after he and his wife, Susan, die.
Buffett is not alone in using the money he has earned for charity.
Soener established the charitable Soener Foundation, which had assets of $1.7 million at the end of 1997 and contriubted $90,600 last year to 39 charities across the Midwest.
Richard and Marilyn Holland met Buffett in the 1950s through a mutual friend. ``He (Buffett) was the first person I ever ran into who made investment ideas make sense,″ said Holland, a retired Omaha advertising executive.
The Hollands live in a one-story house they built in 1957. They declined to disclose the size of their fortune, but tax returns from their charitable Holland Foundation showed it held $26.1 million in assets at the end of last year, including $22.1 million in Berkshire Hathaway stock.
The foundation gave away $812,700 in 1997, including $602,700 to Opera Omaha and $100,000 to Quality Living Inc., an agency that provides care to people with brain injuries or severe physical disabilities.
Earlier this year, they donated $2.5 million to All Our Kids, a program that provides mentors for at-risk youths.
Holland said having more money than they need leaves them with a choice: give some money to charity, or let more than half of it go to estate taxes at their deaths.
``If you aren’t charitably minded, you’ve got a terrible problem, because you’re going to wind up handing it on and letting 60 percent pass to the estate tax,″ Holland said.