The Warren Buffett Challenge

There are investors and then there is Warren Buffett. Better known as the “Oracle of Omaha,”. He is widely considered the most successful investor of the 20th century.

Do you want to know if your annual salary can beat Warren Buffet in the future? It’s time to take on this Warren Buffett challenge!

Following the rules and lessons from Benjamin Graham, he has created a multibillion dollar fortune through investing in stocks and buying and holding companies. As the chairman and CEO of Berkshire Hathaway, Warren Buffett has a net worth of $65.2 billion in 2014, making him the 4th richest person in the world.

So there are only 3 people in the world that don’t need to look up to his wealth. The rest of the world can only dream of a fortune the size he has. For the most of us $65 billion is a surreal amount of money compared to what we earn as an annual salary.

I’ve always found it fascinating to know how it compares to each other. How easily can the rich spend their money on things that are way too expensive for me at the moment.

 

How much does Warren earn with his biggest investment?

The biggest part of Berkshire Hathaway’s portfolio is invested in Coca Cola (KO). Warren loves the product and the company. And even more importantly, he has been one of the early investors in it as well. One of the great returns he’s getting on this stock is the amazing growth in dividend paid by the company.

Berkshire Hathaway holds about 7% of the company shares. Meaning that they get 7% of the total dividend paid out to their shareholders. Sounds like a big number, but how much is this exactly?

Warren Buffett said this back in the 1990s at Notre Dame:

“We have 7% of Coke. There are 660 million eight ounce servings of Coca Cola products being served around the world today, so in effect, we’ve got a 45 million soft drink business with our 7%. We think of businesses that way.
I say to myself ‘just increase the price a penny and that’s another $450,000 a day for Berkshire.’ I mean, it’s a nice sort of thing. When I go to bed at night I figure that by the time I wake up 200 million Cokes will have been consumed.”

So as you see Coca Cola has been, and still is, a big contributor to Warren Buffet’s amazing fortune.

 

Time for the Warren Buffett challenge

Now it is time to put your wealth into perspective. Maybe you are feeling comfortable about your annual salary and the wealth you’ve build for yourself up to this moment in your life. But let’s see how Warren thinks about your income and how it compares to his.

Warren Buffett challenge

Click on the image to open the interactive version. (Source: http://pennystocks.la)

Let me know how you made it through the Warren Buffett challenge!

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