Many Berkshire holders gave substantial gifts of stock to their kids—but not Buffett. He simply gave $10,000—the tax-deductible limit—to each child and to any of their spouses at Christmas.
Such restraint sent them a message, just as giving them millions would have. When the kids were toddlers, Buffett had written to Jerry Orans that he wanted to defer any largesse at least until he could see “what the tree has produced.” In young adulthood, Susie, Howie, and Peter must have grasped that their father still viewed his saplings as unfinished. Philosophically, they defended his approach, and with considerable pride. But they also wondered, as Howie put it, why he couldn’t “lighten up,” and at times seemed to resent his unsubtle efforts to motivate them.
The Buffett kids had open, direct manners that put one in mind of their father (none drank anything stronger than Coke). They also had his eagerness, but were slow bloomers. Each dropped out of college, and each entered into an early, ill-fated marriage. Financially, they had inherited a grubstake from Warren’s father, which Warren had invested for them in Berkshire. Thus they could have been millionaires without working a day.
Susie, alas, sold some stock (when it was under $1,000 a share) to buy a Porsche. After her marriage dissolved, she moved to Washington. There she made contact with Kay Graham, who took it upon herself to help her get an administrative job at The New Republic.4 In 1983, Susie remarried, to Allen Greenberg, a public-interest lawyer and future congressional aide. Warren and his wife were ecstatic about Greenberg, a wry, mild-mannered sort, whom they referred to as “Allen-the-perfect-son-in-law.”5
By the time the Greenbergs moved into a townhouse near Dupont Circle, Susie had used up her Berkshire. The young couple rented out part of their home and had just a tiny kitchen—very tiny. When Susie became pregnant, she wanted a larger kitchen for when the baby came—something she could fit a table into, with a door to the backyard. She had plans drawn up and got an estimate of $30,000. Knowing that her father wouldn’t spring for it, she asked him for a loan, at prevailing interest rates.
Warren turned her down.
“Why not go to the bank and take a loan out like everyone else?” he suggested.
They had a long discussion, in which Warren explained that if he were the quarterback of the Nebraska football team it wouldn’t be fair of him to pass down the job to a son or daughter, and that he felt the same about his money. This was a “rational” response with his daughter’s “best interests” in mind. That was the rub; it was too rational, as if Susie had been just anyone. His daughter was troubled by it.6
When Susie was expecting her second child, she spent much of the time bedridden. “Mrs. Graham”—an ally—would come to dinner with her cook in tow, ferrying glazed monkfish and poached peaches up the steps to Susie’s bedroom. Noticing that Susie had only a small black-and-white television in the room, Graham suggested that she get a bigger, color set—and was horrified to learn that Buffett’s daughter couldn’t afford one. Warren, after all, had a large-screen TV in his house. Graham promptly called Warren, and this time he relented and bought Susie a proper TV.7 Still, Graham had had to shame him into it.
Perhaps because money was the pivotal motivator in his life, Buffett acted as though money were a similarly pervasive and overriding focal point for others. He seemed to think that Susie would see a new television in terms of dollar signs (as he would), or that such a gift could somehow mar his daughter’s open and unspoiled character. To her, it was just a TV.
But Susie deeply admired her father and probably had the easiest time accepting him. Dark-haired and vibrant, she recounted the saga of her kitchen as consistent with everything she knew of him. “He has a flat-out thing,” she said, as if to explain him. “He just doesn’t give us money.”
For Howie, living up to his father was more of a struggle. He had an open-collared, sneakered informality that recalled his dad, but there was a flaw in the likeness, in that Howie was a good deal heavier. Having sold his Berkshire to finance his earthmoving venture—Buffett Excavating, which proved to be short-lived—as well as a house, Howie had gone to work for See’s Candy in Los Angeles. In the early eighties, he had returned to Omaha, remarried and started a family, and gotten a job in real estate. As an aside, he rented some land and planted crops.
As Warren knew, what Howie really wanted was a farm. After “torturing” himself, as a friend put it, Warren made what for him was a truly generous proposal. He offered to buy a farm and rent it to Howie on standard commercial terms (Howie would have to fork over a percentage of his farm income and pay the taxes).
Howie asked his mother why Warren was getting involved.
“Don’t ask,” Susie advised. “Just get the farm.”
But that was not so easy. Warren announced a ceiling to what he would pay for a farm, depending on its potential income. Howie went to farm after farm, making bids “of insulting proportion.” When he’d seen about one hundred of them, he began to despair of getting one, but Warren refused to bend on the price. Finally, in 1985, they bought a farm for about $300,000 in Tekamah, Nebraska, forty-five minutes north of Omaha.
“It was a typical Warren Buffett purchase,” Howie observed. “We bought it at the absolute bottom of the market. I think part of his motivation was to teach me a little about negotiation.”
Howie didn’t even have a telephone at the farm, but it was a joyful refuge for him. He would go out in the spring and fall, often taking his family, working columns of corn and soybeans with a John Deere tractor. But he couldn’t get Warren to share the experience with him. “I can’t get him to come out and see how the crops are going,” Howie said plaintively.
Warren went only twice in six years. He would laugh off Howie’s invitations, saying, “Send me a rent check, and make sure it’s big enough.” Though he had been thoughtful enough to buy the farm, he couldn’t give Howie the fatherly recognition that he craved in other than financial terms. He could look at Howie’s books, but not at his crops—which is what Howie cared about. To Warren, it was just a business. Inasmuch as corn and soybeans are commodities, Warren was blunt about the farm’s being not a very good business at that, sardonically observing, “No one goes to the supermarket to buy Howie Buffett’s corn.”8
Warren did use the farm to “teach” Howie something; he agreed to lower his rent for any year in which Howie got his weight below a specified ceiling. (Warren was obsessed with staying slim, which he associated with longevity. He made similar “weight deals” for money with his wife and daughter.) In most years, this blatant attempt to manipulate Howie’s weight with financial plums failed.9
Warren was more helpful when Howie turned to him for guidance, as he often did. After he got the farm, Howie decided to run for election as a county commissioner (as a Republican, like Warren’s father). Howie was worried that Warren would be seen either as trying to buy the election or—what would be worse—as not supporting him at all. Warren defused this concern by declaring that he would simply contribute 10 percent of whatever Howie raised elsewhere—and Howie won.
Their relationship improved as Howie had kids of his own and, particularly, as Howie’s career began to blossom.10 After his election, Howie was appointed to a state board in charge of promoting ethanol. Ethanol politics put him in touch with Dwayne Andreas, the politically connected chairman of Archer Daniels Midland. Eventually, Andreas hired him, and Howie became a jet-setting executive. Warren bragged to a friend that Howie was “making more” than Warren was, which was his way of showing pride in Howie.11 Seeing his kids succeed on their own “was a real issue with him,” Howie observed—just as getting approval from Warren was a real issue for Howie.
Warren’s younger son acknowledged this openly. Peter had quit Stanford to start a sound studio and, ignoring his father’s sage advice, had sold his Berkshire to buy a $30,000 twenty-four-track tape recorder. He soon realized that he did not have the income to justify it, but he and his wife slowly built a music-production company, Indepe
ndent Sound, in San Francisco. Later, they moved to Milwaukee. Though mostly a jingle producer, Peter scored the fire-dance scene for the movie Dances with Wolves and recorded several well-received albums of New Age music.
On a wintry Milwaukee morning, Peter ducked out of a soundproof glass studio, where two musicians were cutting a commercial, and began to talk about his father. He recounted one rather clumsy attempt by Warren to influence him. Warren had invited Peter to the Alfalfa Club, a very exclusive annual dinner in Washington, but stipulated that Peter cut his ponytail. Peter said no thanks. “He likes to have strings attached,” Peter observed.
In recent years, Warren had started giving his $10,000 Christmas gifts to his kids in various stocks, which Peter felt carried a “message.” “Again—there was a string on it. He was saying this isn’t just money to spend. If you invest it, it will grow to be more. To test our patience.
“I sold most of my [Berkshire] stock. I’m glad I did,” Peter added, the ponytail neatly tucked in a rubber band. “It’s so nice to say I’ve gotten to this point without it.” But a moment later, he said he regretted that his father had not told him—or perhaps that he had not heard his father say—that he could have simply borrowed against his Berkshire and held on to it.
Peter had an unassuming, even inquisitive, manner—as if he, too, were curious about Warren’s character. He was extremely proud of his father’s accomplishments and moral standards. He recalled that Warren had once told him, “Someday you’re going to have to tell your dad to go to hell.” Establishing himself in a new city and selling his Berkshire were part of that, he said. Had Warren ever told his father to go to hell? Peter acknowledged that he didn’t know.
Peter got to know his father better as he had success as a musician. When he played the piano with a fifteen-piece band, before an audience of seven hundred, in Milwaukee, Warren attended and praised him profusely. At one point, he told his son, “We do the same thing”—to Peter, an overwhelming tribute.
By the late eighties or so, Peter, who as a boy had purchased The Father’s Handbook for his remote-seeming dad, felt that Warren and he had finally learned how to talk to each other. When Peter’s marriage broke up, Warren counseled him, and with more empathy than he had shown in the past. One night, they were shooting the breeze at Farnam Street. Around midnight, Peter broached the subject of Peter’s mother, in intimate terms. Warren talked about how he hoped that Susie would spend more time with the Buffett Foundation—more time in his world. “We talked about how Mom had this great opportunity to do what she wants,” Peter said. Warren suddenly grew silent—for him, a sign of emotion. “We talked until 2:00 A.M.,” Peter recalled. “When it was over I remember thinking, Wow, Dad was emotional.’ You could see it in his expression, his lack of words. It blew me away.”
Warren’s renewal with his family may have stemmed in part from a gradual healing with his wife. He had heard more, from Susie directly, about her reasons for leaving him. They had an understanding and a greater openness. As Tom Rogers, a close nephew, put it, the Buffetts didn’t have to “try anything in their relationship. They are each other’s alter ego. Aunt Susie is as much able to cut emotion out of a decision as he is.”12
Warren was in constant contact with his wife. He saw her often, and with as much affection as ever. After an evening at Tom Murphy’s home in Westchester County, when the Buffetts shared a limousine with Stan Lipsey back to Manhattan, the two sat quietly in the back, holding hands the entire way. Susie told a mutual friend it had “worked out great,” meaning that Warren had gotten what he wanted—to stay married to Susie.13 Even now, years after Susie had moved out, she was the one—the only—person in the world he fully trusted.
In 1987, Warren took a big step toward the family by offering Allen Greenberg, his son-in-law, the job of managing the Buffett Foundation. As usual, the carrot had a string—Susie and Allen would have to move to Omaha.14 This they did, buying a home a few blocks from Warren. Susie was soon bound up in Warren’s supportive web. When he wanted a car, Susie went to the dealer and picked it out. At annual-meeting time, Susie helped to organize his social schedule. She was there for him.
As Warren was paying his son-in-law only $49,846 a year, young Susie’s life was no different from those of other Omaha mothers juggling young children and civic involvements. The author happened to visit on a day when her son had chicken pox. Susie was bathing him; she had no nurse or nanny. Ironically, Susie was always fending off fund-raisers who were under the mistaken notion that she had the keys to the fortune.
One time, when Warren was escorting the billionaire Wunderkind of Microsoft, William Gates, through the Borsheim’s jewelry store, they noticed a box in the corner labeled “Buffett Lay-Away.” When Warren asked what it was, an employee sheepishly confessed that Susie had asked them to save a string of pearls, which she was buying on installment. As a birthday gift, Buffett paid off the balance. It began to dawn on him that spending money—particularly at Borsheim’s—could be fun. Another time, he remarked, as if discovering the wheel, “Gee, Suz, women really like jewelry.”
With Susie around, Warren had a greater sense of extended family. Susie often dropped her kids off at Warren’s for Astrid to look after, which tended to knit Astrid into the Buffett family. In fact, Susie even urged Astrid to redo Warren’s house, which still had the sunshiny (but now faded) look given it by Susie’s mom. Astrid and the younger Susie redecorated together, giving it a more subdued style, with Astrid’s signature collection of antique toasters lining the kitchen. (Warren’s wife and at-home girlfriend were closer than ever. This unlikely duo would send presents to Buffett relatives accompanied by a card signed by “Warren, Susie and Astrid.”)15
The younger Susie, and her kids, were around Warren a lot. They seemed to humanize him. He would come to the Greenbergs in a worn jogging suit, get down on the floor, and play with the grandkids. At dinner, he would listen to the family chatter with a distracted look, pursing his lips, bobbing his chin, occasionally inserting a wisecrack, and salting (and resalting, after every bite) his hamburger. He told Kay Graham that Susie’s return to Omaha had changed his life.16 He even gave her a ruby bracelet—for Warren, hardly a casual gesture.
In a sign that he was becoming comfortable with “what the tree produced,” he made his daughter a director of the Buffett Foundation and modestly relaxed his inheritance policy. The kids would get something—maybe three million or so apiece.17 (He didn’t tell the children how much.)
Whatever the figure, it would not allow Susie, Howie, and Peter to lead the despised life of the “superrich.”18 Wholly apart from its effect on his kids’ lives, he simply didn’t think they were entitled to vast amounts of money. It would confer too much power, which in his view belonged to the public. “The idea that you get a lifetime supply of food stamps based on coming out of the right womb strikes at my idea of fairness,” he said.19 Ultimately, the claim checks should go to society.
But philanthropy posed as large a dilemma to Buffett as giving money to his kids. The idea of bestowing a handout—even to charities—made him edgy. James Burke, a friend who had left Johnson & Johnson to run Partnership for a Drug-Free America, said Buffett had a “block.” If he gave the money away, he was “giving away the chips he could use to make money.”
The Buffett Foundation was for many years rather a joke. In 1979, when Buffett had a net worth of $150 million, the foundation’s total endowment was merely $725,000. Its gifts that year were a trifling $38,453.20 But after Buffett began the Berkshire charitable program, in 1981, Susie and he used it to fund the foundation. And Buffett steadily raised the corporate gift, though it did not rise as quickly as Berkshire’s share price. By 1990, each stockholder could allocate $6 a share from the Berkshire treasury to a favored charity, meaning that Warren and Susie were indirectly giving away $3 million.
As exemplary as this corporate program truly was, it didn’t require Buffett to take out his wallet. Of his private, non-Berkshire money
, of which he had many tens and perhaps hundreds of millions,21 Buffett did not give his foundation so much as a penny. And even his indirect gift, via the Berkshire program, was inconsequential compared to his $4 billion fortune.
Buffett’s tightness was a sore spot with his friends. They knew that he was socially conscious. They knew he didn’t spend it on himself. And on a personal level, they thought of him as “generous”—a word they often used. In an exceptional case, Buffett made small but anonymous Christmas payments (discovered via a bank error) to the mother of his boyhood chum Bob Russell. More typically, he showed a generosity of spirit in nonfinancial gestures, such as writing thoughtful, handwritten notes to people, or acting as their sounding board. But when even close friends asked for money, and for worthy causes, Buffett sent them packing. The writer Geoffrey Cowan called Buffett when he learned that Weekend Edition, the lively National Public Radio news show, was facing a funding crisis. Without a fast $50,000, Weekend Edition might go off the air. Most people would have given something, if only because of social pressure, but Buffett, in his sweet independence, was perfectly comfortable saying no. He didn’t give the news show a dime.22 Another friend, Ann Landers, frequently urged Buffett to loosen up. She tried her “darnedest,” she said, to get him more interested “in what he could do for the world.”
What he does is piling and heaping and heaping and piling. So what is this all about? He did buy a plane, and he loves it. So I try to use the plane as an example. I say: “Look how much fun you’re having with the plane. Maybe if you gave some of it away you’d have fun with that.”
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