Bill Murphy Jr., writing for Inc., shares his observations and opinions regarding a surprise shareholder letter from Warren Buffett that showcases his wisdom and philosophy, earning him the distinction of being someone who thinks differently from other wealthy people. Murphy says Warren Buffett is just unlike other billionaires, and he did not realize this until he read the letter.
At 94 years old, Buffett is still going strong and in his surprise letter, he writes:
“Father Time always wins … To date, I’ve been very lucky, but, before long, he will get around to me.”
The combination of Buffett’s enviable longevity and exceptional wealth has led to this unannounced and fascinating 1,500-word letter.
The letter largely updates Buffett’s philanthropic plans. He’s converting some of his Berkshire Hathaway shares, totaling about $1.1 billion and donating them to four family foundations. He also describes naming successor trustees after his children in case they are not able to give away everything before the end of their lives.
But there’s a lot more worth reading, and Bill Murphy was moved by a paragraph in which Buffett talked – without using the word – about what he hopes his “legacy” will be. It comes just after he writes admiringly of his three children, who are now 71, 69 and 66 years old, and who are the first in line of defense, so to speak, in terms of his giving.
Buffett says:
“I’ve never wished to create a dynasty or pursue any plan that extended beyond the children. I know the three well and trust them completely. Future generations are another matter.
Who can foresee successive generations’ priorities, intelligence and fidelity to deal with the distribution of extraordinary wealth amid what may be a far different philanthropic landscape?
Still, the massive wealth I’ve collected may take longer to deploy than my children’s lives. Tomorrow’s decisions are likely to be better made by three living and well-directed brains than by a dead hand.”
Bill Murphy wisely observed and contrasted Buffett’s philosophy with the exact opposite of what so many business leaders, entrepreneurs and “wannapreneurs” describe as their key life goal: amassing “generational wealth” so that their children’s children – and their children’s children’s children, and so on – will start their lives with massive advantages over everyone else.
While Buffett’s children are undoubtedly wealthy by any ordinary standard, they’re not billionaires and almost certainly won’t be. That’s by design.
His moral compass on this matter seems to derive from two insights:
1. As he suggests above, who knows what those future generations will be like? Will they be good and moral people? And if not, should they have any right to the massive wealth Buffett has acquired simply because they will also be “future Buffetts?”
2. Buffett seems acutely aware that he has been the beneficiary of enormous luck – beginning, as he’s said many times before, with being born a White male in the United States in 1930.
There are a few other points Buffett makes that Murphy thinks are insightful – especially for people who amass wealth and have something to leave for their families.
He says his goal with his children (this isn’t new, but it’s worth noting) has been to leave them “enough so they can do anything but not enough that they can do nothing.”
Next, he has insights into how people who wind up controlling a lot of wealth can expect to be inundated with requests to distribute it. Buffett’s solution is to require that all three of his children agree unanimously before making any significant distributions.
Finally, he suggests that “all parents, whether they are of modest or staggering wealth,” should sit down with their adult kids and “have them read your will before you sign it.”
The key is ensuring that each child fully understands the reasoning behind your decisions and the responsibilities they will take on after your passing. If they have questions or suggestions, take the time to listen carefully and incorporate any ideas that make sense. You don’t want your children asking, “Why?” when you are no longer able to respond.
Oh, and of course, he talks about compound interest. As Buffett remarks quite sensibly:
“The real action from compounding takes place in the final 20 years of a lifetime.”
Occasionally, you meet a true sage – someone whose immense wealth hasn’t spoiled them but whose grounded values and hard-earned wisdom inspire and guide others.
My thanks go to Bill Murphy and his article.
Francis Kong’s “Inspiring Excellence” podcast is now available on Spotify, Apple, Google, or other podcast streaming platforms.
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