In the mid-1960s, a husband and wife named Dorothy and Myer Kripke faced a difficult problem. A problem that is quite common among many middle-aged couples. How do you properly plan retirement? In fact, Dorothy and Myer were way ahead of most of their peers when it came to retirement planning. Thanks to a diligent saving behavior and a small inheritance, they had managed to resist roughly in 1965 $ 67,000. That’s about $ 500,000 today, adjusted for inflation.
That was the good news. The bad news was that when they were ready to retire in a decade or two, they now had to protect and expand their savings so they would still be there. After months of stressful debates, Dorothy gave her husband one simple piece of advice:
“Myer, put the money with your friend Warren. “
This friend Dorothy was referring to was a neighbor who recently built a reputation for managing money in her small town of Omaha, Nebraska. The Kripkes had met the man at casual bridge games and family get-togethers over the holidays. Myer was too embarrassed to ask for help but eventually gave in. The neighbor, Warren Edward Buffett, agreed without hesitation. Guess how this story ends …
As you’ve probably noticed by now, Dorothy and Myer Kripke happened upon a man who would eventually be considered one of the greatest financial investors of all time. A man whose local investment business would one day get along roughly $ 500 billion in wealth. A man who is now the eighth richest person in the world with a personal fortune of $ 105 billion.
Of course we’re talking about the Omaha Oracle itself, Warren Buffett.
Myer Kripke was initially very reluctant to ask the young money manager to manage his savings. For one thing, he thought it was a great imposition. Second, Myer was concerned about mixing business and friendships. But most of all, he knew that Warren’s minimum investment limit at the time was $ 150,000. So there was no point even bringing it up!
Fortunately Dorothy was not bothered by this hesitation. But believe it or not, Myer refused to reach for Warren 3 YEARS! Finally, Myer gave in. Warren agreed to manage the money without hesitation. In Warren’s own words:
“I liked Myer [and] I wanted people who, if things went bad, we could still be friends.“
Fortunately for both men, things didn’t go badly. Over the next thirty years, Warren’s business expanded at an exponential rate. And along the way, Myer and Dorothy Kripke’s $ 67,000 life savings skyrocketed just as quickly. In Myers own words:
“We got in relatively early with a modest amount of money. Then it exploded like an atomic bomb.“
The Kripkes were soon millionaires. Then multimillionaires. Incredibly, by the mid-1990s, her life savings were over $ 67,000 $ 25 million. That’s about $ 40 million today, adjusted for inflation.
In the mid-1990s, Berkshire Hathaway’s stock price hovered between $ 20,000 and $ 40,000 per share. Let’s divide the difference and use $ 30,000 per share to estimate how many shares the Kripkes owned. If the Kripkes were worth $ 25 million at $ 30,000 a share in the mid-1990s, that means they owned roughly 833 Berkshire Hathaway shares. If they had never sold a single share when Dorothy died in September 2000, it would have been worth $ 50 million. When Myer died in May 2014 and Berkshire stock was trading at $ 215,000 per share, its 833 shares would have been worth $ 180 million. Someone who owns 833 shares of Berkshire Hathaway today would be worth it …
That’s $ 358 million. From a $ 67,000 investment.
How did Myer and Dorothy’s lives change as they became millionaires, then multimillionaires, and finally 50-150 millionaires?
Amazingly, when Myer and Dorothy got rich, they never stopped leading very humble lives. You never bought a house. They continued to rent a modest three-bedroom Omaha apartment for $ 900 a month. Myer, an ordained rabbi, continued to work in his local synagogue and earned an annual salary of $ 30,000.
The Kripke’s greatest treat turned out to be philanthropy. This amazing couple have donated millions of dollars to a number of charities throughout their lives. They donated $ 7 million to rebuild a library at the Jewish Theological Seminary in Manhattan. The Kripkes met as students outside of this library decades ago. Eventually, they donated an additional $ 8 million to their alma mater.
Dorothy Kripke died in September 2000 at the age of 88 and Myer died in May 2014 at the age of 100 New York Times for helping us learn this incredible story.