« Freakonomics Radio

32. Growing Up Buffett

2011-05-11 | 🔗
What’s it like to wake up one day and realize Dad is a multi-billionaire? That's what happened to Warren Buffett’s son Peter -- who then started to think about whether or not to join the family business.
This is an unofficial transcript meant for reference. Accuracy is not guaranteed.
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today from a guy named Peter Buffet and he's a musician and his father is famous who'd. You think his father Of course, Jimmy Buffet, but that's not Peters, Dad Peters. Dad is named Warren as in Warren Buffett, chairman and ceo of the investment group, Berkshire Hathaway in the third richest man in the world, but Peter didn't follow his dad into the family business, which is exactly why we're talking to him Peter. But composer author philanthropist, and I do those in that order actually may well may be switched around a little but dependent either. We agree, I think so. Ok, very good
from W and Y see and a young american public media, this is for economics. Radio upon casket explores the hidden side of everything. Here's your host, Stephen Governor Peter Buffered, has written a book called life is what you make. It find your own path to fulfilment it sort of an investment guide, but not the kind of investing that Warren Buffett does it's about investing in yourself about acquiring the kind of human capital that makes you happy now. Warren Buffett, as you probably know,. famously down to earth for someone who's worth about forty seven billion dollars. He lives in the same house. He bought for thirty one,
thousand five hundred dollars in nineteen fifty eight in Omaha Nebraska, and that's where Peter Buffet grew up. It was a very ordinary upbringing. Peter is fifty three years old, his whole life. He says when people find out who's kitty their shocked. They say, but you're so normal. Well, I think the assumptions are based on, of course, celebrity called what we ve seen just grow and grow. It's always been there, of course, since Cleopatra, probably by but celebrity culture and the persistence of the world. So there was the you're, not an obnoxious, rich kid that Thanks their entitled everything and then there's the I walked a public school. I had the same english teacher, my mother I do know all these kind of reach.
Really fundamental, midwestern things. This is all taking place in Omaha, Nebraska Ahmad Nebraska. My great grandfathers name was earnest and his brothers name was frank. Very I have a frank and earnest, but You know, so it came from again or just a collection of assumptions around what a child of a wealthy person probably grew up in acts like he thinks he's entitled to all that kind of stuff. Talk to me for a minute about your degree of interest in Berkshire, grow, Well, you know growing up, we really didn't know what my dad did was quite mysterious. He
read a lot when she still doesn't. I will say that you walk into the house today. You see the same thing that I saw in nineteen. Sixty five I mean there. Is it he's just this consistent human being in spades? It was incredible, but we didn't know what he did. In fact, when my sister fill out a form, I think in fourth or fifth grade about what our parents did. She put security an hour, and it was assumed that what he did is checked alarm systems without it it you know to a kid it's like. what are the numbers on the page mean, and what exactly is in the New York Stock Exchange and buying and selling Alice a week at? We really did know now at some point you figure out, I'm guessing that may have been gradual. Tell me about that. It was very gradual. People will ask me, you know what was it like growing up in this household when did you realize that your father had amassed all this wealth at an end? My answer is, I was probably about twenty five. The truth is it just wasn.
Around I mean I can't say enough for actions speak louder than words, so we didn't grew up around the exposition of of wealth. Ok, at some point you figured out your dad was that Security analysis was not checking via alarms that the right good money and it would have really was, and that he'd actually done done quite well and was was doing even better. If we at some point, did you get an in? Did you get interested in Berkshire Hathaway itself in the business and did you put a toe into it? Were you in Tell me about that. Well, and I am the last of three children so sistered and go into the business? My brother didn't, although he is sort of looked at as taking over the chairmanship at some point, but I need to go into the business I was the last great hope for my dad and I went off. The college I got in and frankly I went to Stanford and I went because I got in and I didn't know what I was gonna be when I had supposedly grew up and at some point.
about a year- and I thought well, it's dumb not to at least explorer this a little bed and my dad was very accommodating, certainly sent me some information about the business and a bunch of old annual reports and things and yet our it just wasn't: airfoil didn't speak at home and I knew it and he knew it and he wasn't pushing it at all. I mean I grew up him saying: do what you love. That's the thing, there's nothing more important than that and we both knew that this wasn't something that I was passionate about. So sounds kind of wonderful eyes. and ass. They are very lucky. What would you say to other fathers or mothers who founded companies about whether they should involve their sons or daughters in running the business after the founder stepped aside? When you, what do you say to them? Well,
You don't my dad talks about the ovarian lottery, and this idea that you're, you know you're born into these circumstances that you can't at least as far as I'm concerned, you can't control when you're on the other side of being bored, and so I think, there's a version of that that holds true in this. You know the odds of having a son or daughter that are as passionate and excited and driven as the founder of a business was or even though, person that took it over whatever that might be whatever passion and drive was there in that person? The odds of that being in the next generation, I think, are incredibly small, but I think that if the child is truly passionate about it and you know, lives and breathes the same thing absolutely, but again, what are the odds
dream coming up, how running the family business is either a dream come true or your worst nightmare, also how Berkshire Hathaway is a little bit lake your favorite beaten his dream. Thanks to Pennsylvania, lottery, scratch offs, pennsylvanians or scratching their way to fine with new games every month, big top rise, and second chance drawings, excitements, always in order so try Pennsylvania Lottery Scratch offer your ticket to fund and get yours today. Keep on scratching must be eighteen or older. Please play responsibly benefits older pennsylvanians every day
economics. Radio sponsored by wonder is business movers podcast when Coca COLA change their recipe to what they called new Coke in nineteen. Eighty five. The backlash was swift and severe- and yet the man who drove the change Chairman Robert, always wetter pulled new coke from the shelves in a matter of months, wondering is business movers explores boys wet, is controversial decision and the public response, but the real story of new Coke is far more human and complex, listen to wonder, ease business movers, podcast on Apple Podcast, Amazon, music or ad free in the wondering Athens
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keep in mind that billion is to be spent on other people's, not kicking around cash, but don't worry about the Buffett. Kids Peter, for instance, when he was nineteen, was giving up a quest in the form of Berkshire Hathaway Stock because we didn't grow up wealthy. Word or a seemingly. We never thought about an inheritance. We never assume we would be getting anything at any time and its and we weren't bitter or thinking that we should, for some reason we just grew up in a house where you work hard and you make your way in life. And hopefully you have a well live life based on all sorts of criteria, and so when we got the money at nineteen I probably must have known it was coming as my brother and sister came first, but I wasn't thinking about it like, oh, my god, I can't wait and in fact I remember, I think that letter started from my dad with bonanza time has arrived. By that I mean it was this moment were. I was searching and thinking
I think I want to get in the music. This money shows up, and so I talk to my parents about what do you think? Maybe I could quit school for a little bit and try my hand it music and my dad and mom. Both were extremely supportive of that idea. My daddy some advice in terms of here's, what you could spend in a month and not really eat into much principle and as a college get I didn't need much. So we didn't expect it, and so when it came, it was a surprise, and I certainly didn't expect anything else and and so that mentality of course makes you want to put that ninety thousand dollar. to work as far as I'm concerned now, I'm sure you ve been asked this question before and I know you answered it before, but that ninety thousand hours, when you were nineteen, would be worth what today over seventy million dollars, and- and I am living proof that I paraphrase it as you I hear your life but living proof that I would much rather have invested in myself.
Taken the time and grown my own life with all the mistakes and all the successes and everything else that I can say is mine, as opposed to have a pile of money that essentially belong to somebody else's success? Do people believe you, when you tell that to them well. They do, and it must be that the sound of my voice, because its I love being this kind of living example of somebody that would much rather have a life than the money. Do you ever have a dream, or maybe it's a nightmare where, you are running Berkshire Hathaway.
Yeah. I know that it would be somewhere between a dream and enhance mare, because I do feel, like all three of US kids have an element of my dad's overarching value system in philosophy and and and take on life. So there is a certain feeling that would be ok. You know if, if I did that, except that I have a life that I love and even the full and of their philanthropic work. Word me a little bit about getting into that, so deeply that I'd lose track of where my music was going. Luckily, that hasn't happened, but that would be my concern is that I get thrown off my own personal track. Frankly, tell me what you know or what you think about the the succession
Plans at Berkshire Hathaway, I dont, know really anything. What I think is that will start to hear more because he doesn't want to have that the company a sort of limbo or question mark, and so I know when he feels its right he'll make announcements that that put people at ease for sure he's incredibly healthy, especially for diet is phenomenal, he's not going anywhere anytime soon. He wants to be buried with a wager bored, so he can keep working afterwards. It oh eight he's going to do everything it can to stay kurd end and engaged and you know my brother will make sure that that there's a consistent overall value system still at work any indication yet of what shareholders think of your brother's secession,
chairman. No, I have no idea and it'll be interesting, of course, to see what happens with the sack immediately after my dad's death, because people will, you know, assume something massive has changed and, of course, in some ways it has, but I kind of like in it to the death of John Lennon. I mean there's a guy where he passed away and enters a certain aspect of what he does is no longer here, but the catalogue of strong it's not gone away, I'm still using the beetle songs the underline companies at Berkshire strong. Those will not change, and so I don't think the value should shift at all, but people's emotions are different working class. He has something in me: stay tuned for five hour long episodes of freakin comics radio they'll be playing on finer public radio stations. summer. You'll hear a lot more about the ins and outs of family business. But you also hear from romanian witches the deed,
of suicide studies and a couple of prostitutes, bunch of economists as well see then Reaganomics radio is a co production. Have w and Y see eight p m? american public media and Debonnair productions, our staff include Susie Luxembourg, Chris near you, re, Lamb and calling Campbell. Our engineer is David Herman subscribe to this path. Castle Itunes and you'll. Get the next episode in your sleep. You can find more audio at for economics, radio, dot com and as always, if you want to read more about the hidden side of everything that a free economic stuff last summer.
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Transcript generated on 2021-03-17.