Warren Buffett is the world's third-richest man - see how the notoriously frugal billionaire spends his fortune

Hillary Hoffower

Oct 6, 2018, 18:27 IST

Warren Buffett is the world's third-richest man - see how the notoriously frugal billionaire spends his fortune

Paul Morigi/Getty

Despite his $88 billion-plus net worth, Warren Buffett lives a fairly frugal life.

Warren Buffett's estimated net worth is $88.3 billion.
But you wouldn't know the investor is America's third-richest man by his frugal lifestyle.
Buffett lives modestly and is one of the world's most generous philanthropists, opting to give away most of his billions to charity.

Warren Buffett, America's third-richest man, has increased his net worth by around $10 billion in the past year, according to the Forbes 400, which was released on Wednesday. But what else would you expect from the "Oracle of Omaha," who began building his wealth at age 11?

Now 88, Buffett's estimated net worth stands at $88.3 billion - but you wouldn't know it by Buffett's frugal ways.

Still living in the house he bought in the 1950s and driving an equally modest car, Buffett prefers to keep and grow his money rather than take it out of the bank. Not one for lavish purchases, he spends relatively little of his billions - except when it comes to philanthropy.

Buffett is regarded as one of the most generous philanthropists in the world, having donated more than $46 billion since 2000.

However he uses his money, not much is spent on himself. See how Buffett spends - or doesn't spend - his billions.

Warren Buffett has a net worth of $88.3 billion, making him the world's third richest person.

He began building his wealth by investing in the stock market at age 11 and currently runs Berkshire Hathaway — but you wouldn't know he's a billionaire by the way he spends his money.

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 bought for $31,500 in 1958. Adjusted for inflation, it was $250,000 in today's dollars. It's currently worth an estimated $652,619.

In 1971, Buffett purchased a vacation home in Laguna Beach, California, for $150,000 — it's currently listed for sale for $7.9 million.

Buffett also has a modest set of wheels. He previously drove a 2006 Cadillac DTS, which he replaced in 2014 with a Cadillac XTS, which has an original starting price of $44,600.

Buffett doesn't spend much on technology, at least when it comes to his mobile phone. He still uses a flip phone instead of a smartphone.

Buffett isn't a fan of high-end designer suits. He only wears suits — of which he owns about 20 — made in China by designer Madame Li.

Buffett tops off his style with an $18 hair cut.

Buffett eats the same thing every morning for breakfast — McDonald's. He spends no more than $3.17 on his order.

He also likes to treat his buddy Bill Gates to lunch at McDonald's — which he's paid for with coupons in the past.

Buffett is also a fan of Coca Cola; he has said he typically drinks five Cokes a day — so you can imagine he spends more on the beverage than the average person.

Compared to other CEOs, Buffett doesn't spend a whole lot on his hobbies. He plays bridge for about 12 hours a week.

Buffett also likes to hit the green for some golf — but he doesn't spend his money on fancy golf clubs. "I'm a member of every golf club that I want to be a member of […] I'd rather play golf here with people I like than at the fanciest golf course in the world," he once said in a Q&A.

He also puts a lot of money toward books. He's said he has a "disgusting pile" of books by his chair, and he spends 80% of his day reading.

Buffett once spent $100 to take a Dale Carnegie course on public speaking. It helped him propose to his wife, he said.

The one thing Buffett has splurged on is a private jet. He told CNBC, it's "the only thing that I do that costs a lot of money."

But that wouldn't be possible without his wise investing strategies. It takes money to make money — while 99% of Buffett's net worth is tied to Berkshire Hathaway, he invests the other 1%.

He purchased shares in Wells Fargo "a long, long time ago," but it's unclear what his stake in the company is.

He also purchased 2 million shares, an 8% stake, in Seritage Growth Properties for a total estimated cost of $73 million.

He also owns an undisclosed amount of JPMorgan stock. He's said to be a fan of the bank's CEO, Jamie Dimon.

But not all his investments have been wise — back in 1951, he bought a Sinclair gas station with a friend. The Texaco station across the street was more popular, and he lost $2,000 out of his $9,600 savings.

Buffett spends most of his billions on philanthropy; he's considered one of the most generous philanthropists in the world, having donated more than $46 billion to causes since 2000.

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.

In 2016, he donated $2.9 billion to various charities, including The Bill and Melinda Gates Foundation and the Susan Thompson Buffett Foundation, in honor of his late wife.

Buffett, through the Susan Thompson Buffett foundation, has donated tens of millions to the Planned Parenthood Federation of America and the National Abortion Federation.

He donated even more to the Bill and Melinda Gates Foundation in 2018 — around $2.6 billion worth of Berkshire Hathaway stock.

That same week, he donated about $800 million in Berkshire Hathaway stocks to the Susan Thompson Buffett Foundation, Sherwood Foundation, Howard G. Buffett Foundation, and NoVo Foundation.

Buffett only plans to leave his kids $2 billion each; the rest of his fortune will be donated to philanthropic causes. He once said he wants to leave his children "enough money so that they would feel they could do anything, but not so much that they could do nothing."

There is one thing money does buy for Buffett personally, he said in a CNBC interview: Freedom.

"My life couldn't be happier" he once said. "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.”

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