This is a story of how he turned that money into a massive fortune.
In 1965, a common predicament confronted an ordinary couple, Myer and Dorothy Kripke, residing in Omaha, Nebraska. At a juncture where many individuals in their middle years often find themselves, the Kripkes were grappling with the seemingly impossible task of strategically planning for their retirement.
But this couple had one advantage: they were already financially ahead of the curve compared to most middle-aged couples of their time, thanks to their moral saving practices and modest inheritance. After adjusting for inflation, they had painstakingly accumulated savings of approximately $67,000 by 1965, a substantial amount of nearly $650,000 in today’s dollars. Yet, they faced the challenge of safeguarding this nest egg and allowing it to grow sufficiently when they finally hung up their work hats.
Their heated debates lasted for several months until Dorothy suggested to Myer, “Invest the money with your friend, Warren.” She was referring to a confident Warren Edward Buffett, a 35-year-old acquaintance who lived nearby. He had begun to create a positive buzz in Omaha for his proficient money management skills. The Kripkes had gotten to know Buffett over casual bridge games and festive celebrations.
Initially, Myer was too apprehensive to ask for Buffett’s assistance. He felt it might be seen as a significant imposition and was wary of entangling friendships and business affairs. Moreover, he was acutely aware that Buffett’s minimum investment requirement at that time was $150,000, far exceeding their available funds.
Despite Myer’s apprehensions, Dorothy remained steadfast. Amazingly, it took Myer three whole years to finally gather the courage to approach Buffett. To Myer’s relief, Buffett readily agreed to manage their funds. Buffett’s reason for accepting this proposal was straightforward and amicable, “I liked Myer [and] I wanted people who, if it went bad, we could still be friends.”
Unknown to the Kripkes then, they had entrusted their life savings to a man who would eventually become one of the most respected financial wizards in history. A man who would rise from his humble beginnings in Omaha to amass a personal fortune of $110 billion, managing a formidable $500 billion asset portfolio and securing his place as the world’s fifth-richest person.
Mirroring the meteoric rise of Warren Buffett’s financial empire, the Kripkes’ initial investment of $67,000 soared astronomically. As Myer once stated, “We got in fairly early with a modest amount of money. Then it mushroomed like an atomic bomb.” The Kripkes soon found themselves in the millionaire bracket, then multi-millionaires, and their wealth surged.
By the mid-1990s, their modest investment had swelled to an astounding $25 million, about $40 million in today’s terms. If Berkshire Hathaway’s stock price were $30,000 per share during the mid-1990s, the Kripkes would have owned approximately 833 shares. Fast forward to September 2000, the Kripkes’ wealth was estimated at $50 million at the time of Dorothy’s death.
When Myer passed away in May 2014, their 833 shares in Berkshire Hathaway were worth a staggering $180 million, given the stock’s price of $215,000 per share. If they were still owners of these 833 shares today, their net worth would be an unbelievable $394 million – an extraordinary return on an initial investment of $67,000.
Despite their remarkable financial transformation, the Kripkes lived a modest life. They didn’t splurge on a luxurious home; instead, they rented a humble three-bedroom apartment in Omaha for $900 a month. Myer, an ordained rabbi, remained committed to his local synagogue, earning $30,000 annually.
As their wealth continued to amass, the Kripkes chose philanthropy as their most significant indulgence. Over the years, they generously donated millions to various charities. Their most notable contributions included a $7 million donation to reconstruct a library at the Jewish Theological Seminary in Manhattan. This place held sentimental value for them as that was where they first met as students. Their alma mater also benefited from their benevolence with an additional donation of $8 million.
Dorothy Kripke passed away in September 2000 at 88, and Myer Kripke lived until the ripe old age of 100, passing away in May 2014. Their legacy isn’t just about their financial success but also their humility and philanthropy in the face of extraordinary wealth. It’s a testament to the potential for exceptional financial returns when guided by one of the world’s greatest investors and an affirmation of the importance of humility, prudence, and generosity, no matter how high the fortunes rise.