When Peter Buffett turned 19 in 1977, he inherited $90,000 worth of stock in his father's company. FYI, $90,000 in 1977 is worth around $450,000 today. That's a pretty amazing amount of money to a 19 year old! What would you have done with $90,000 when you were 19?
As you might expect from a newly-flush 19 year old, Peter sold the stock spent the money on his passion. Not some of it. All $90k. Peter's passion was, and still is, music. Upon inheriting $90,000, Peter sold the shares, dropped out of school and pursued his dream of being a professional musician.
Here's the problem.
As you may have inferred by the title of this article and Peter's last name, Peter's father is Warren Buffett. And the $90,000 worth of stock he inherited was in Warren's holding company Berkshire Hathaway…
So how big of a mistake did Peter make?
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Peter Buffett grew up believing that he could do anything. The real privilege in his life didn't come from a check from dad. It came from the love, nurturing, and belief in himself his parents gave him. They let him find his way, make mistakes, and figure out how to get back up and try again.
As we mentioned earlier, Peter inherited $90,000 worth of Berkshire Hathaway stock on the day he turned 19 in 1977. At the time he was an undergrad student at Stanford University who didn't much like school and really just wanted to be a professional musician.
So, flush with cash, Peter sold the shares, dropped out of Stanford and moved into a studio apartment in San Francisco to pursue his dream. After putting himself on a modest monthly budget that would buy him a few years of living, Peter spent all of his remaining inheritance on recording equipment so he could make an album.
And over time his dreams of being a professional musician came true! Peter would go on to release over a dozen new-age albums. He also contributed music to a handful of film scores. Most famously, he produced the music used in the fire dancing scene of the 1990 Kevin Costner movie "Dances with Wolves." The film score would go on to win an Academy Award, though Peter did not personally win an Oscar.
He has an impressive career and appears to live a very fulfilling life! But I know what you're thinking. How much would $90,000 worth of Berkshire Hathaway stock inherited in 1977 be worth today? Oh you know, roughly…
$400 million
In interviews over the years Peter has insisted that he has no regrets. Instead of having $400 million today he has a life he loves. And believe it or not, having a billionaire father does not mean Peter hasn't struggled financially. At one point, he had two mortgages on his house. He has struggled with credit card debt. He drove a beat up car and still frequently needs to raise money to put on shows.
Being human, there were times he wished for the easy way out. When he was in his 20s, he approached his father to ask for a loan. Warren turned him down. At the time, Peter was angry, but in retrospect he appreciates the lesson that taught him. He learned more about himself and his ability to get back up and try again than he ever would have if he'd had the Buffett money and sailed through life.
Peter Buffett likes knowing that his success is his own and not a result of living off his father's money.
Despite only receiving a $90,000 inheritance for his personal use, Peter and his siblings each received $1 billion from their dad with one caveat—it was to be used for charitable work only. And if you're thinking Peter earns a huge salary to run that charity, you are wrong. According to their most recent charity filing, Peter did not receive any compensation from his own foundation.
Peter and his wife Jennifer spent years trying to figure out the most effective way to be philanthropists. They eventually co-founded the NoVo Foundation which "supports the development of capacities in people – individually and collectively – to help create a caring and balanced world." They have paid special attention to supporting young girls and adolescent girls, particularly in the developing world. NoVo is dedicated to empowering girls and women around the world.
In closing, I just want to thank my parents for loving me, nurturing me, and instilling in me the belief that I can accomplish anything, but not enabling me, much like Warren Buffett did for his son Peter.
