Warren Buffett, called the “Oracle of Omaha” for his savvy investing moves, and the billionaire chairman behind Berkshire Hathaway, gets a lot of press for his financial decisions, lifestyle and investing moves. When Buffett makes a move, the world pays attention.
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However, along with the fame of being one of the richest people in the world come judgments and perceptions that aren’t true. Here are seven myths about Warren Buffett you should dash from your beliefs today.
He Always Knew Berkshire Hathaway Would Be Successful
Given Berkshire Hathaway’s success at making money, it’s easy to imagine that Buffett bought the company knowing full well it would one day reap him and others so much money.
However, it actually started out as a textile company on the edge of failure. He believed that he could make money by shoring up what he thought would be one of the last remaining textile mills in the country. In fact, even though the industry was in peril, Buffett bought another textile mill in 1975, too.
While he certainly had confidence in his ability to turn a profit, even he couldn’t have envisioned just how successful he would go on to become.
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He’s a Stocks-Only Type of Investor
While some billionaires invest in risky and speculative things like art and cryptocurrencies, Buffett has been known for taking more of a tried and true path. This has led many to believe he only invests in stocks, particularly dividend-earning ones of companies with a solid history of stability and profitability.
Yet in August 2023, Buffett told CNBC that Berkshire Hathaway had purchased $10 billion in U.S. Treasurys and planned to buy another $10 billion worth.
He Never Makes a Rash Investment Decision
With a reputation for making researched, thoughtful and careful investments, it’s easy to believe that Buffett never makes rash decisions, either. And while that is true for the most part, even Buffett wasn’t immune to the panic that followed the COVID-19 pandemic’s economic losses.
Buffett sold off most of his stocks in airlines when they had bottomed out due to a lack of travel, losing him billions of dollars. Those stocks ended up rebounding by the end of 2020, but Buffett could not recoup those losses.
He Thinks Cash Is King
A man as old school and frugal as Buffett might be seen to adhere to that old adage “cash is king” and be sure to keep a lot of it on hand. Yet, in a 2009 interview with Charlie Rose, Buffett said that cash is actually a bad choice for anyone who hopes to maintain or grow their wealth, because cash only loses value over time. While cash can give you security, it can’t earn you more of itself.
He Avoids Tech Stocks
Buffett is old enough to have started investing at a time when technology stocks were very much in their infancy. As tech boomed, while there were years Buffett avoided tech stocks, even the old luddite came on board by investing in Apple, which now comprises more than 42.5% of his portfolio.
He Lives a Billionaire’s Lavish Lifestyle
Anyone who thinks Buffett lives a flashy life hasn’t been paying attention. Unlike other billionaires who seem happy to flash their fancy cars, expensive yachts and other big expenditures, Buffett is famously frugal, driving a modest car, living in the same home he has for years and even eating at McDonalds. You won’t find the Berkshire-Hathaway chairman flashing expensive watches or suits — he’s a practical man.
He Advocates Extreme Frugality
However, this has led to another myth, which is that he practices and preaches an “extreme” frugality — which is just not true. At the 2008 Berkshire Hathaway shareholder meeting, Buffett said he does not advocate extreme frugality.
While he admits to being a fan of “living within your income,” he said that if you’re making a reasonable income and have safety nets like retirement accounts, there’s no harm in spending extra on things like a family vacation. He even said there are advantages to spending money on your family.
It’s easy for people to both project beliefs onto a man in Buffett’s position and to assume things about him. Buffett lives a transparent enough life that anyone can quickly glean online that what you see is pretty much what you get when it comes to the Oracle of Omaha.
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This article originally appeared on GOBankingRates.com: 7 Warren Buffett Myths You Should Stop Believing
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