All About Financial Matters

Archive for July, 2006

In the following article, we’ll focus exclusively on what some might describe as the “secret” to Warren Buffett’s wealth.

It’s common knowledge that Warren Buffett is one of the richest men in the world. However, most people attribute his vast wealth to an ability to pick stocks that dramatically rise in price over time. While it’s certainly true that Warren Buffett has had an amazing career picking winning stocks, it should be noted that his estimated $40 plus billion dollar fortune does not reside in a brokerage account. In other words, Warren Buffett did not literally start out with, for example, $10,000 dollars in a Merrill Lynch brokerage account and over time build up his holding within that same brokerage account to $40 plus billion dollars.

The vast majority of Warren Buffett’s $40 plus billion dollar fortune is derived from his ownership interest in Berkshire Hathaway, which is itself a publicly traded company. Warren Buffett purchased Berkshire Hathaway, a struggling textile company, not long after winding down a stock market trading investment partnership he had successfully managed for over 13 years.

A brief bit of history… at the age of 25, Warren Buffett began a limited stock market trading investment partnership. Warren Buffett was the general partner, and started with $100. There were seven limited partners who contributed $105,000 towards the partnership. The limited partners received 6 percent annually on their investment and 75 percent of the profits above this target amount. Warren Buffett earned the other 25 percent.

Over the course of the next thirteen year period, Warren Buffett compounded money at an annual rate of 29.5 percent. This was amazing, because during that same thirteen year period, the Dow Jones Industrial Average declined in value five different years within the same thirteen year period!

In 1969, Warren Buffett thought it best to end the stock market trading investment partnership because he thought the stock market had become very speculative. Over the past thirteen years, Warren Buffett’s share of the investment partnership had grown to be worth over $25 million.

Over the years, Warren Buffett has transformed Berkshire Hathaway into a thriving conglomerate with a substantial interest in the insurance industry.

Shares of Berkshire Hathaway have risen dramatically over time, largely as a result of Warren Buffett’s ability to successfully invest the vast sums of money generated by the insurance companies that Berkshire Hathaway owns, but also as a result of the celebrity status Warren Buffett enjoys within the global investment community.

Buying shares of Berkshire Hathaway has been one of the best ways to align ones financial interests with those of Warren Buffett and to essentially profit from his spectacular ability to invest in other companies.

The intense level of investor interest in Warren Buffett has propelled shares of Berkshire Hathaway to stratospheric heights, thus boosting the value of Warren Buffett’s ownership interest in the company even higher.

That, in a nutshell, is one interpretation of the secret to Warren Buffett’s wealth.

Nameer Eno is a contributing content editor at the warrenbuffett.com Warren Buffett fan club forum.

If your plans to buy your dream car have taken a back seat because of insufficient funds; take a break. As long as car loan are affable in the market, you have high prospects of buying the car of your choice.

A car loan can be secured or unsecured. Secured car loan demands you to offer a collateral. The collateral can be the car that you are going to buy, or in some cases you can also offer your house as a security to the lender. In return, the lender usually allocates you benefits such as low Annual Percentage Rate (APR), flexible terms, longer repayment duration and easier monthly instalments. However, there is a risk that if you don’t keep up the repayments, your collateral might be repossessed by the lender.

Unsecured ask4loan.co.uk/car-loan.html” target=_blank>car loan is safer, but somewhat difficult to obtain. There is no involvement of collateral, and consequently the interest rates are higher. This loan is meant especially for tenants, or those homeowners who are sceptic to offer their house as a collateral. The repayment duration is not so desirable in this case. One major advantage of unsecured car loan is that it is risk free, and does not involve unnecessary hassle of property evaluation. Thus a lot of time is saved in approval of an unsecured car loan.

It is necessary to do a thorough research of the market to get favourable deals in terms of APR. You may get the quotes from respective lenders online itself, so as to proceed towards getting up close and personal with your dream of buying a car.

The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Ask-4-Loan as a finance specialist.
For more information please visit: ask4loan.co.uk ask4loan.co.uk