How Warren Buffett made his first million

Warren Buffett, one of the most famous and respected investors of our time, built his fortune on simple but powerful principles, notably patience and a deep understanding of company value. From a very young age, he had a clear ambition: to become a billionaire. This determination, combined with intellectual rigor and a thoughtful investment method, allowed him to reach his first million well before the age of 35, as he had prophesied as a child. Here's how his journey was built, step by step.

Table of Contents

• The beginnings: an early fascination with money and numbers
• Discovering the Stock Market and the First Investment Lesson
• Rigor and optimization from the youngest age
• The power of compound interest: making money work for you
• Meeting Benjamin Graham: the spiritual father of investing
• First major investments and creation of an empire
• The acquisition of Berkshire Hathaway: a decisive turning point
• An investment strategy faithful to its principles
• The wisdom of Warren Buffett: a parable about speculation
• Conclusion

The beginnings: an early fascination with money and numbers

Warren Buffett grew up in a family where finance was a daily reality. His father, a stockbroker, was a role model. Very early on, Warren became interested in numbers, developing games and methods for retaining information, such as license plates or the populations of American cities. At only six years old, he began earning his first income by selling chewing gum door-to-door, then reselling Coca-Cola bottles for a profit. These odd jobs brought him his first dollars and taught him the importance of effort, strategy, and regular work.

Discovering the Stock Market and the First Investment Lesson

At eight years old, Buffett devoured books on the stock market, particularly those of his father, and at ten, he visited Wall Street with him, an experience that profoundly marked him. He notably exchanged with major figures in finance, strengthening his interest in investment. At 11 years old, he read A thousand ways to earn a thousand dollars and sets an ambitious goal: to become a millionaire before the age of 35.

Despite this ambition, his first steps in the stock market were not an immediate success. In 1942, he invested $1,000 in Cities Service stock, which quickly plummeted. He eventually sold it for a small profit, while the stock price soared shortly after. This experience taught him a crucial first rule: patience is essential in investing.

Rigor and optimization from the youngest age

In parallel, Warren Buffett took on various odd jobs, including delivering newspapers. His approach was methodical: he optimized his routes to maximize his earnings. In 1944, at the age of 14, he declared his first income, an amount equivalent to about $10,000 today. His tax return already revealed a certain sophistication, as he deducted business expenses such as watch repairs or bicycle maintenance, demonstrating his early sense of tax optimization.

The power of compound interest: making money work for you

Buffett quickly understood the power of compound interest, a mechanism where generated interest is added to the initial capital to produce new interest, thus creating a snowball effect. This understanding allowed him to grow his fortune exponentially over the years.

His first major investment was the purchase of a farm that he rented out, ensuring a regular income. At 17, he diversified his activities by buying used pinball machines that he installed in hair salons, generating substantial passive income. These entrepreneurial experiences allowed him to build significant capital even before starting his university studies.

Meeting Benjamin Graham: the spiritual father of investing

Under family pressure, Buffett enrolls at Columbia University, where he meets Benjamin Graham , author of The Intelligent Investor . Graham becomes his mentor and profoundly influences his investment philosophy. He teaches him two fundamental rules:

• Consider a stock as a share of a company, not just a speculative instrument. One must analyze the company's solidity and profitability before investing.
• Do not follow market trends, but rather buy when stocks are undervalued and sell when they are overvalued. This distinguishes the investor from the speculator.

Another key principle: determine a company's intrinsic value and only buy its shares at a price below that value, a rigorous and mathematical approach that perfectly matches Buffett's passion for numbers.

First major investments and creation of an empire

At Columbia, his fortune reaches about $12,500. He then invests heavily in the auto insurance company Geico , which sells its products directly by mail, allowing for low prices. This company will become a fundamental pillar in his portfolio.

After his professional beginnings as a stockbroker, Buffett launched his own wealth management company in Omaha in 1956, with $174,000 already in assets. In 1959, he met Charlie Munger , his business partner and lifelong friend. Together, they shared a common ambition and complementary visions, which would strengthen their success.

The acquisition of Berkshire Hathaway: a decisive turning point

In the early 1960s, Buffett acquired a struggling textile company, Berkshire Hathaway . Instead of sticking to its main activity, he uses this company as a financial vehicle for his investments. Berkshire Hathaway thus becomes the central pillar of his financial empire, and it is with this structure that Buffett crosses the threshold of a million dollars.

An investment strategy faithful to its principles

Throughout his career, Buffett remained true to his investment principles: he favored simple, durable companies, often leaders in their sector, such as Gillette, Coca-Cola, or Walt Disney. He invested in companies offering products or services with stable and continuous demand, which guaranteed long-term solidity.

His approach proved extremely fruitful: by 2025, a share of Berkshire Hathaway Class A is worth over $750,000, offering a phenomenal return estimated at over 5.5 million percent according to Bloomberg.

The wisdom of Warren Buffett: a parable about speculation

Buffett likes to pass on his lessons through simple stories. One of his favorite parables perfectly illustrates his aversion to speculation:

A petroleum prospector dies and arrives in heaven. Saint Peter informs him that the quota of prospectors is full, so he must go to hell. The prospector then asks to make a call to his colleagues. When they discover oil in hell, all the prospectors rush there. Saint Peter then tells him that a place has opened up in heaven, and the prospector decides to join his colleagues, because the rumor might be true.

This story illustrates the human tendency to follow the crowd without thinking, while true wealth is built with patience, reflection, and method.

Conclusion

Warren Buffett's journey, from selling his first chewing gums at the age of six to his billionaire status, is based on solid principles: patience, a deep understanding of value, tax optimization, and the ability to make money work for oneself. His first stock market experience, although difficult, taught him valuable lessons that guided his future choices.

His story reminds us that with a clear vision, discipline, and a thoughtful strategy, it is possible to build a lasting fortune. Warren Buffett is not only an outstanding investor, he is also a master in the art of transmitting an investment philosophy that is accessible and pragmatic for everyone.