Warren Buffett, one of the world’s wealthiest billionaires, eats the same breakfast daily.
On the way to his office, he stops by McDonald’s and orders one of the three items – two sausage patties, egg, and cheese, or a bacon, egg, and cheese.
Frugality is often seen as being the opposite of fun. It gets a bad rap and is seen as self-sacrifice. Frugality is all about getting the maximum value out of your money. This is something that WarrenBuffet understands well and follows.
Warren Buffet is one of the wealthiest people on this planet, but he is also incredibly economical in his habits. Read on as we talk about some of the most frugal habits and financial wisdom of Warren Buffet.
What Frugal Billionaire Eats Almost Every Breakfast At Mcdonald’s?
Most people wonder what billionaires eat. Do they eat gourmet food every day? Do they ever have fast food?
While we do not know about the eating habits of all billionaires, we do have some input about Warren Buffet.
Warren Buffet enjoys McDonald’s, where he eats breakfast almost daily. On the five-minute drive to his office, which he has been making for 50 years, Buffet stops by McDonald’s and orders breakfast. His breakfast consists of one of these three things –
Two sausage patties ($ 2.61)
Egg and cheese ($2.95)
Bacon, egg, and cheese ($3.17)
Why Does Warren Buffett Eat Breakfast At Mcdonald’s Every Day?
The next question that may come to your mind is why he would eat at McDonald’s every day when he can buy the most expensive meals at the best restaurants.
An interviewer asked Warren Buffett this question, and Warren replied that it was the meal of his choice. He informed me that the meals at McDonald’s taste much better than some expensive foods.
In the HBO documentary Becoming Warren Buffet, Warren said, as I shave in the morning, I tell my wife to put either $2.61, $2.95, or $3.17 in a small cup by me in my car. Each amount corresponds to one of his favorite go-to breakfast items.
He tells the documentary director Peter Kunhardt, ‘’When I’m not feeling quite so prosperous, I go with $2.61, which is two sausage patties. I put them together and poured myself a Coke. A bacon, egg, and cheese biscuit meal costs $ 3.17, but the market is down this morning. So, I’ll pass up the $3.17 and go with the $2.95.”
How Else Does Warren Buffett Live Frugally?
Warren Buffett is worth an estimated $109.4 billion, but you will never know it by his lifestyle.
This 90-year-old billionaire enjoys a life of simple taste, frugal living, and generous philanthropy. He lives in the same house in Omaha, Nebraska, that he bought in 1958 for $31,500.
Today this home would cost an equivalent of $285,000. He has no intention of putting it up for sale, either.
He once stated that he had known individuals with houses worth a hundred times more than his own.
However, he feels that for such people, their assets and possessions own them more than vice versa.
He once told a group of business students that he lived a similar life. He drives to his office regularly, eats similar food, and reads ordinary newspapers.
The only exception here is that he owns and uses a personal luxury plane to get around.
Does Warren Buffet Own Mcdonald’s?
The restaurant franchise model appealed to Buffet, so he invested in Mcdonald’s.
According to the book ‘Of Permanent Value: The Story of Warren Buffet,’ it all started with Buffet, Bill Gates, and a McDonald’s outlet in Hong Kong.
This encounter occurred in late 1995, and by the end of 1996, Warren Buffet’s Berkshire Hathaway owned over 30 million shares of McDonald’s stock.
A few years after that, there was a two-for-one stock split. So it became around 60 million shares in today’s terms. However, by the end of 1998, the position had primarily been sold off.
Buffet chose to dispose of his McDonald’s stock quickly, but not before making a handsome profit.
Look at what happened to McDonald’s stock’s price-earning ratio during this time. At the end of 1995, it was 23.25, but by the end of 1998, it had become 35 times the earnings.
What Are Warren Buffett’s Top 10 Holdings?
Here’s a list of Warren Buffett’s top 10 holdings by size –
Coca-Cola (KO) – 400 million
Kraft Heinz (KHC) – 325.6 million
American Express (AXP) – 151.6 million
U.S. Bancorp (USB) – 131.9 million
Wells Fargo (WFC) – 127.4 million
General Motors (GM) – 80 million
Bank of New York Mellon (BK) – 72.4 million
Sirius XM (SIRI) – 50 million
How Did Warren Buffet Get Rich?
Warren Buffett was an entrepreneur from a very young age. He used to sell Coca-Cola and chewing gum door to door when he was just 11 years old.
Buffett saved all the money he earned and bought a farm when he was 14. He invested in the stock market when he was 11 and bought $35 worth of stock.
While in high school, he made money by delivering papers, starting a pinball machine company, and many other ways. By the time he finished college, he had saved around $9,800, about $101,000 today.
Warren Buffett went to college and worked as a stockbroker. He earned over $100,000 per year in today’s money. While Buffett was a stockbroker, he formed many partnerships.
The first partnership he began was in 1956 when he was 26. He contributed $100 in that partnership, while the other partners contributed $105,000. By 1959, Warren had opened seven organizations with a 9.5% stake in more than 1,000,000 dollars of association resources.
By the time Warren was 30, he was a millionaire. He combined the entirety of his partnerships into a single entity. He went on to make $1 million interest in a windmill-producing organization one year and the following year in a bottling organization.
In 1962, Warren Buffet put his resources into a New England textile company called Berkshire Hathaway and bought a portion of its stock. In 1965, Berkshire Hathaway offered to buy out Buffet.
The company’s offer in writing was lower than Buffet’s offer, which the company had agreed on verbally. This annoyed Buffet, who decided to buy the company instead of selling out.
The textile company was not profitable, but it eventually became an investment vehicle for Buffet.
What Is Warren Buffett’s Net Worth?
Known as the Oracle of Omaha, Warren Buffett is one of the most successful investors in the world.
According to Forbes.com, this American investor, business tycoon, philanthropist, and chairman and CEO of Berkshire Hathaway has a net worth of $109.4 billion as of May 28, 2021. He is the world’s seventh-wealthiest person.
Warren Buffett has promised to donate over 99% of his wealth. He has given away more than $41 billion, mainly to the Gates Foundation and his kids’ foundations.
In 2010, he and Bill Gates launched the Giving Pledge, asking billionaires worldwide to donate 50% of their wealth to charitable causes.
Warren Buffet’s 13 Principles
Warren Buffett prides himself on the simple rules he follows when dealing with his companies and investors.
Even though these rules are more than 35 years old, Buffett still values them. These 13 principles have served Warren Buffet well over many years and continue to do so.
Let us go through these rules and understand why they are essential –
Although Our Form Is Corporate, Our Attitude Is Partnership.
Buffet doesn’t consider Berkshire shareholders as uninterested investors of financial security. He envisions each Berkshire share as a part-interest in every wholly-owned business under the company’s corporate umbrella. The same ideology holds for the publicly traded companies in which Berkshire invests.
We Eat Our Cooking.
Berkshire does a great job of aligning the interests of corporate shareholders with outside investors. Buffet has 98% of his worth in Berkshire shares, and Charlie Munger has most of his family’s wealth invested in Berkshire.
We Measure By Per-Share Progress.
Unlike other organizations, Berkshire doesn’t aim to bring a Behemoth into the world economy. Size is useless if it comes at the expense of per-share performance. Keeping this idea in focus, Buffett believes Berkshire should be able to earn good returns, even with the handicap of seeing its capital base grow significantly through the years.
Direct Investment Is Best.
Buffett prefers to own a diversified group of cash-generating businesses directly or wholly to maximize returns. The next best option is owning partial stakes in such businesses by purchasing common stock. Berkshire opts for a mix of these strategies to allocate capital.
Consolidated Reported Earnings Might Reveal Relatively Little About Our True Economic Performance.
Warren Buffett owns too many businesses, and one sum cannot represent the overall performance adequately. One holding can have an outsize impact during one year, even though the other holding may also be doing well. You must go through the information provided on each business to get a complete understanding.
Accounting Consequences Don’t Influence Our Operating Or Capital Allocation Decisions.
Buffett values undistributed earnings from his subsidiaries. He knows that those businesses can make good use of their own capital. This approach by Buffett has been rewarding for his shareholders.
We Use Debt Sparingly.
Berkshire has little need for conventional debt as so much insurance float is available. Though leverage can enhance returns, it can also lead to substantial capital losses.
A Managerial ‘Wish List’ Will Not Be Filled At Shareholder Expense.
Buffett does not believe in pursuing growth for growth’s sake by diluting existing shareholders’ interests. He has no delusions about the grandeur of Berkshire’s size.
Noble Intentions Should Be Checked Periodically Against Results.
Buffett prefers to check his performance by comparing book-value gains against the returns of the S&P 500 on a five-year rolling basis. If the rise in book value has performed better than the S&P 500, Warren Buffett’s decision to retain Berkshire’s earnings was wise. Paying a dividend would arguably be the better move if it weren’t. That’s something that Buffett has not yet had to contemplate.
We’ll Issue Common Stock Only When We Receive As Much Business Value As We Give.
Berkshire prefers using cash rather than stock while doing deals. If you use stock, you give up the current value of the shares and any future value that the business will generate.
We Are Not Interested In Selling Any Good Businesses That Berkshire Owns.
Buffett believes that selling a good business isn’t worth any price, even if it is terrible for Berkshire’s financial performance. Buffett prefers to hold on to poorer businesses as long as they produce some cash returns. He likes to let poor-performing companies languish rather than invest massive amounts in turnaround efforts.
We Will Be Candid With You.
Buffett makes himself accessible to all his investors through annual letters, regular disclosures, and well-attended shareholders’ meetings.
We Usually Will Not Talk About Our Investment Ideas.
While Buffett is happy to share general information about investing, he draws a line regarding specific investments and companies he may be interested in. He knows that being too open about proprietary knowledge can hurt his shareholders.
Final Thoughts
Few investors around the world have the reputation that Warren Buffet has.
This famous investor and CEO of Berkshire Hathaway has a net worth of $109.4 billion and is the world’s seventh-wealthiest person, yet he believes in living a frugal life.
So, when someone asks what frugal billionaire eats almost every breakfast at McDonald’s, do not hesitate to mention Warren Buffett’s name.
Frugality is all about understanding which things are essential for you and which aren’t. So, follow Warren Buffett’s example and make the best of your life.
Anika Jindal
Anika is a CPA and founder of What Anika Says. She shares simple and actionable frugal living, money management and money-saving tips to live a debt-free financially independent life. She has been featured on popular websites like Bankrate, Forbes, Mint ,and Authority Magazine. Byline: MSN