10

SECRETS
HIDDEN IN

WARREN BUFFETT’S
WALLET

BY ROBERT P. MILES

Warren Buffett’s 24-year-old wallet was recently purchased for $210,000 at a charity auction because it included a stock tip. But before Buffett sent his wallet to the winning bidder, he removed a significant and personal item that reveals 10 secrets to his extraordinary wealth-building success.

A

t a recent auction for a girl’s charity, Warren
Buffett’s Wallet was won for a bid of
$210,000 because it included a stock tip.
Before he sent his 24-year-old wallet to the winning bidder, he removed a significant and personal item that reveals many secrets to his extraordinary wealth-building success. What was the item? I’ll tell you in a moment.
First, let me take you back to 1969. At this time, Warren Buffett was in the process of liquidating his Buffett Partnership and focusing his time and energy on building the holding company that’s known today as Berkshire Hathaway.
And one of the first businesses he purchased as a wholly owned subsidiary of his new conglomerate was the Illinois National Bank, which was, at the time, the largest bank in Rockford. One of the things that makes this purchase particularly interesting is that, viewed over time, the purchase and management of the bank provides an

almost picture-perfect example of the ten investment and management principles that have made Buffett the world’s greatest investor.

SECRET NUMBER 1:
Invest in an old economy company that’s a leader in an industry you understand.
Banking may not be the world’s oldest profession, but it’s one of the oldest, so a bank is clearly an “old economy” company. The
Illinois National Bank [INB] was established in
1931 — right in the middle of the Depression — by Eugene Abegg, with a beginning net worth of $250,000 and $400,000 in deposits. By the time Abegg’s bank became