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In 1965, This Man Asked His Neighbor – Warren Buffett – To Manage His Life Savings. Guess How That Turned Out…

In in the mid-60s, an Omaha man named Myer Kripke humbly asked his neighbor, a young upstart money manager named Warren Buffett, to manage a small life savings. Wait until you hear the outcome of that.

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Dorothy and Myer Kripke, a husband and wife team, had a challenging issue in the middle of the 1960s. A rather typical issue for many middle-aged couples. How should you approach retirement planning? When it came to retirement planning, Dorothy and Myer were actually far ahead of the majority of their colleagues. They managed to save about $67,000 by 1965, thanks to their strict saving practices and a modest inheritance. That is equivalent to about $500,000 in today’s dollars after inflation.

The good news is that. The bad news was that they now had to preserve and increase their savings so they would still have them in ten or twenty years when they were ready to retire. After months of difficult debate, Dorothy gave her husband some straightforward counsel:

“Myer, invest the money with your friend, Warren.”

This friend Dorothy was referring to was a neighbor who had recently gained a good local reputation for managing money in their small town of Omaha, Nebraska. The Kripkes had come to know the man over casual bridge games and family get-togethers at holidays. Myer eventually gave in after feeling too ashamed to request assistance. Warren Edward Buffett, the neighbor, nodded in agreement without thinking. Guess the outcome of this tale…

Warren Buffett - Dexter Shoes
Warren Buffett – Dexter Shoes / Dimitrios Kambouris/Getty Images

Dimitrios Kambouris/Getty Images/Warren Buffett wearing Dexter Shoes

As you have probably guessed by now, Dorothy and Myer Kripke met a man who would later be regarded as one of the greatest investors of all time by mistake. a man who, one day, would oversee around $500 billion in assets through his small-town investing company. A man with a personal net worth of $105 billion who is now the eighth-richest person in the world.

Of course, we are referring to none other than Warren Buffett, the so-called Oracle of Omaha.

Myer Kripke was very hesitant at first to ask the young upstart money manager to handle their life savings. For starters, he believed it would be perceived as a significant burden. Second, Myer was concerned about combining friendships and work. But more importantly, he was aware that Warren had a $150,000 minimum investment cap at the time. Therefore, there was no reason to even bring it up!

Dorothy and Myer Kripke
Dorothy and Myer Kripke

Thankfully, Dorothy didn’t let those hesitations get in the way. But believe it or not, Myer resisted reaching out to Warren for THREE YEARS! Myer finally gave in. Warren gave his immediate consent to handle the money. According to Warren:

Fortunately, neither man experienced a negative outcome. The following thirty years saw exponential growth for Warren’s company. And along the way, Myer and Dorothy Kripke’s $67,000 life savings ballooned just as quickly. In the words of Myer:

Pretty soon, the Kripkes were millionaires. then there were millionaires. Amazingly, by the middle of the 1990s, their life savings of $67,000 had grown to more than $25 million. That is equivalent to about $40 million in today’s dollars after accounting for inflation.

The share price of Berkshire Hathaway fluctuated between $20,000 and $40,000 throughout the middle of the 1990s. Let’s split the difference and figure out how many shares the Kripkes owned at $30 per share. If the Kripkes were worth $25 million at $30,000 per share in the middle of the 1990s, they would have held about 833 shares in Berkshire Hathaway. At Dorothy’s death in September 2000, if they had never sold a single share, their value would have been $50 million. With Berkshire stock trading at $215,000 per share by the time Myer passed away in May 2014, their 833 shares would have been worth $180 million. Currently, the value of 833 shares of Berkshire Hathaway would be…

$358,190,000

That’s $358 million. from an investment of $67,000.

How did Myer and Dorothy’s lives evolve as they went from being billionaires to multi-millionaires to eventually being between $50 and $150 millionaires?

Amazingly, Myer and Dorothy continued to live extremely modest lives even after they became affluent. They never purchased a home. They kept paying $900 a month to rent a modest three-bedroom apartment in Omaha. Myer, an ordained rabbi, continued working at his local synagogue earning a salary of $30,000 a year.

The Kripke’s biggest luxury ended up being charitable giving. Throughout their lives, this amazing couple donated millions of dollars to a number of charities. They donated $7 million to help rebuild a library at the Jewish Theological Seminary in Manhattan. Outside of this library, the Kripkes first met as students many years ago. They ultimately gave their alma institution an additional $8 million.

Dorothy Kripke died in September of 2000 at the age of 88 and Myer died May 2014 at the age of 100. Thanks to the NYTimes, we are now aware of this amazing tale.