Riding Out the Subprime Disaster by Robert Kiyosaki

Posted on Monday, April 16, 2007, 12:00AM

You've no doubt heard about the subprime mess in the mortgage industry. That's the bad news.
But there's a flip side: Even though there's trouble in the subprime market, bankers haven't stopped lending money on good real estate to sound investors.
How Subprime Went Down the Drain
Instead of quivering in fear of a real estate crash, savvy investors need to ask what led to the subprime disaster and how they can profit from it. Here are some of the causes:
1. Early in 2001, the crashing stock market caused Alan Greenspan to drop short-term interest rates to 1 percent. Instead of the stock market roaring back, the residential real estate market took off.
2. Pension fund managers -- the people who collect your 401(k) money, for example -- needed to find returns that were higher than those in the stock or bond markets, so they began lending money to hedge funds, private equity funds, and large mortgage firms.
In other words, the people you entrusted your retirement savings to were willing to invest it in riskier ventures just to get you a higher return.
3. China and other foreign nations were willing to finance our national debt, our war, and our lifestyle. Foreigners loaned us money to invest or to use to buy their products.
4. This led to five types of foolish or unsophisticated investors, who drove up the price of real estate, which led to the boom in subprime loans and the eventual bursting of the bubble.
The Usual Suspects
Those five investor types are best illustrated by the following people (and although I've changed their names, they're actual people I met):
• John and Sally: First-time homebuyers
With low interest rates and easy loan qualification, newlyweds John and Sally bought a new house in a bad neighborhood at an inflated price. They signed their future earnings away with a 125 percent loan. With the extra money, they put in a pool and bought all new furniture. Their first child arrived a year later -- and their home has dropped in value.
• Joe and Suzy: Credit card abusers
These folks use their house like it's an ATM. Every time Joe and Suzy get into credit trouble, they refinance their home to pay off their credit card bills. That is, they substitute short-term credit for lifelong debt.
• Ed and Mary: Empty nesters
Ed and Mary are baby boomers whose kids have left home for college. With their extra money, the couple bought a vacation home as an investment. They used the equity in their primary residence as a down payment on the vacation home, and now have two mortgage payments. They're wrongly convinced that the houses are assets, and that real estate always goes up in value.
• Jack and Janice: Bigger is better
Jack and Janice, surprised by the escalation of prices in their neighborhood, sold their home and bought a bigger home in a more prestigious and expensive neighborhood. Today, they're having a tough time financing their (or rather their neighbors') standard of living.
• Fred and Phyllis: The flippers
These are novice investors who think flipping real estate is the way to wealth. Fred and Phyllis have never been through a real estate downturn. Prior to the real estate bubble, they were day traders in dotcom stocks.
In 2003, they became real estate "experts." Believing that real estate always goes up in value, they found a mortgage broker who financed 10 properties with nothing down, with what are known as liar loans.
The problem is, the project Fred and Phyllis invested in wasn't built yet and then ran into construction delays. Rather than go through the pain of selling their 10 homes, the couple turned in the keys and walked away, returning to their day jobs.
A Silk Purse from a Sow's Ear
Does all this make real estate a bad investment? Obviously not, just as a stock market crash doesn't make stocks a bad investment. What it does do is underscore the foolishness of crowds and the mania of markets.
Actually, right now is a great time for real estate investors. Today, in many markets, the price of real estate is still coming down. On top of that, interest rates are low. So the subprime mortgage mess is bad news for sellers but good news for buyers.
As usual, there's an outcry that the government should intervene. But that raises the question of how laws against greed, stupidity, and foolishness are passed and enforced. The fact is that subprime lending will never end -- people with bad credit, or who are greedy and/or excessively foolish, will always find ways to get the credit they neither deserve nor can afford.
Think I'm wrong? This evening, right after a TV news story on the subprime disaster, a commercial appeared encouraging homeowners to buy furniture today and not make payments until 2009. I rest my case.
A Fender-Bender or a Train Wreck?
Last month, Alan Greenspan cautioned the world that a U.S. recession is possible in 2007. If the subprime mess continues to spread and credit dries up, his warning could come true. A recession, along with the ongoing Iraq war, the national debt, and baby boomers retiring in massive numbers, would deliver a severe blow to the U.S. and world economies.
So I recommend that you get into a cash position, and save as much as you can as quickly as possible. The good news is that there will be bargains galore. If you have cash you'll be able to purchase real assets and fancy liabilities such as jewelry, artwork, nice cars, and big homes at cut-rate prices.
Unfortunately, in a recession the people who suffer the most aren't the rich, but the wanna-be rich and the poor. The poor will find it harder than ever to get additional credit, even if they're hard-working, have a decent credit score, and have some cash. The wanna-be rich -- those who are rich in credit only -- will be the ones donating their homes and their bling to bankruptcy auctions, second-hand stores, garage sales, and swap meets.
Many experts and commentators say that the subprime debacle is just a fender-bender in the economic parking lot; others say it's the headlight of an oncoming train. Regardless of which one it is, it represents a great time for bargain hunters to become genuinely richer.

[Original Article]

British Pounce per Ounce

Retirement interrupted

Retirement interrupted
Tuesday May 22, 4:17 pm ET
By Donna Rosato, Money Magazine staff writer Walking along a pier in Daytona Beach with their youngest grandson on a recent Saturday afternoon, Steve and Carol Daimler stopped to see what fish the locals were catching. The fishermen wowed 10-year-old David with a big flounder they'd just landed and photos of a 500-pound, nine-foot shark they'd once caught.
After a day spent playing miniature golf, eating homemade ice cream and splashing around in his grandparents' in-ground pool, David declared, "This is the best day of my life."
Such perfect afternoons are exactly what Steve, 61, and Carol, 60, had in mind when they retired to Florida from Virginia two years ago. But those days are rare. Instead, the Daimlers spend most of their time consumed with selling two investment properties they bought shortly after the move - holding open houses, distributing fliers, cold-calling realtors and catering to prospective buyers.
A more typical day: On a midweek afternoon, Carol got a call from a prospect who said he and his wife were just outside one of the houses and wanted to see the interior. The only hitch: The house is an hour's drive from where the Daimlers live. The caller said he'd wait, so Carol and Steve jumped in the car. But by the time they arrived, the phantom buyers had disappeared - the frantic trip was a bust.
To this day, the properties remain unsold, draining nearly $6,000 a month from the Daimlers' dwindling retirement kitty. The couple had thought the properties would help finance the lovely new life they planned to lead in Florida. They had retired from their jobs - Steve was a sales executive and Carol a benefits consultant - and moved to Florida to be closer to David and twins Mark and Nicole, 13, their oldest daughter's kids.
To supplement their retirement savings of $260,000, they figured they'd buy fixer-upper homes to renovate, then sell at a profit in the state's hot housing market. "We thought we'd make $100,000 without batting an eye," says Carol.
But when the housing bubble burst, so did their dreams of a real-estate funded retirement. The properties have been on the market for nine months without a serious offer, and the carrying costs are killer: The Daimlers pay more than $65,000 a year on their mortgages (including loans for their primary residence and a vacation house in North Carolina), plus tens of thousands more for property taxes, insurance and maintenance.
The couple are pulling out $15,000 a month from savings to cover their expenses, and they've already run through more than half of their nest egg. The irony: On paper they seem to be in great shape, with a net worth of $1.6 million. But since most of that money is tied up in real estate - assets they can't easily sell - it doesn't ease their current cash crunch.
Money is so tight that Carol has stopped filling prescriptions for her cholesterol medicine. Steve says he has no choice but to go back to work. "The financial pressure is too great," he says.
The Daimlers are certainly not the only retirees to have miscalculated financially. In fact, nearly two-thirds of workers who retired and subsequently returned to work say they went back because they needed the income.
But being in good company is no comfort to the couple. "We're in this beautiful area and see our neighbors doing fun things like cruises, golfing and going to the country club, and we can't enjoy any of it," says a frustrated Carol.
Watching their savings drain away, she admits, "is scary." Worst of all, Steve confesses quietly: "I feel like I've let down Carol and the kids." She counters, "We both made this decision, but now it feels like a failure."
Putting faith in real estate
Of course, when home prices were rising fast - especially in hot spots like Daytona Beach - the Daimlers' plan to turn a quick profit flipping houses seemed to make sense. Especially since, unlike many hopeful flippers, the couple were experienced home buyers and investors.
The high school sweethearts - Steve spotted Carol at a pizza parlor across from their Long Island high school - bought their first house at 19, shortly after they married. It was in Florida, where Steve was working as a technician at the Kennedy Space Center.
When the couple moved back to New York seven years later, they sold the house for a $10,000 profit and bought a fixer-upper. Four years later they sold that house too and bought a more spacious home in northern Virginia, where they settled down to raise their two daughters and son (now ages 38 to 42).
Shortly after the move, Steve changed careers and began selling computers. Eventually he became a sales director, earning about $150,000 a year. Carol focused on raising the kids when they were young, later getting her real estate license. By 1991, though, she was working for the state of Virginia as a disability case consultant, raising their income to $200,000 a year.
The family lived well but not lavishly. They saved enough to put the kids through college without loans and steadily put away money for their own retirement too - although not enough, they readily admit. But they weren't worried because they had made a conscious decision to finance their retirement largely through real estate investments.
"I know you should have a diversified portfolio," says Steve. "But I believed real estate would give us bigger returns." In 1986 the couple bought their first investment properties - two townhouses near their home in Springfield, Va. - using money Carol inherited from her mom.
In the early 1990's they sold one of the houses and used the proceeds to build a vacation home in the Outer Banks. Current estimated value: $900,000. They sold the other townhouse in 2001 and used the money to add on to their Virginia home, which they sold in 2005 for nearly $700,000.
A life-changing move
The idea of retiring and moving to Florida came to the Daimlers after a family Christmas gathering at their home in 2004. When their grandkids, then 7 and 11, went home to Daytona Beach after the holidays, Steve and Carol were heartbroken.
"They seemed to be growing up so fast, and we were missing out," says Steve. Plus, he'd become weary of the extensive job-related travel that kept him away from home for long stretches.
To supplement their savings, the couple planned to launch a sideline business, buying houses in need of a little TLC, fixing them up and then selling them for a profit. "We knew prices wouldn't keep going up like they had been," says Steve. "But we figured with demand from baby boomers retiring, homes in Florida would keep appreciating."
Carol quit her job first, in the spring of 2005. Shortly after, the couple sold their house in Virginia and paid cash for their retirement dream home: a $640,000, 3,700-square-foot house with a game room and an in-ground pool in a gated community in Port Orange, south of Daytona Beach.
The couple took real estate investing courses online and joined the Central Florida Realty Investors Association to network with local experts. When Steve retired in March 2006, their daughter, an area real estate agent, helped them search for properties to launch their business.
Exactly how fast the local real estate market was deteriorating wasn't clear in August when the Daimlers bought two three-bedroom, two-bath houses: one in a Daytona gated community for $235,000; the other in Palm Coast for $120,000.
To finance the purchases, they took out a $400,000 mortgage on their home. They spent $31,000 on renovations and listed the houses in September. But since then the market has been flooded with homes for sale, and the Daimlers have been caught in the changing current.
They've tried every strategy they can think of: holding dozens of open houses; offering a higher-than-usual 4 percent commission to buyers' agents; distributing brochures; running thousands of dollars' worth of newspaper ads; lowering the prices on the homes by $40,000; and offering rent-to-own and other financing options.
They've met with countless buyers but have yet to close a deal. Time and money are running out. The Daimlers' only income is the $36,000 a year they get from renting their vacation house in peak season. They're reluctant to tap Carol's small $25,000 lump-sum government pension. Plus, they're too young to collect Social Security. And they have $31,000 in credit-card debt from the renovations of the investment properties.
Perhaps worst of all, they're so busy trying to sell the houses, they see their grandkids - the primary motivation for the move - only once a month.
With just $120,000 left in his 401(k), now all in money-market funds, Steve decided in March to go back to work. He's an energetic man who likes to rock climb and run. But at 61, he's concerned that he'll find it hard to get a job or earn close to his former six-figure salary. "I know he doesn't want to go back but we don't have a choice," Carol says.
One thing hasn't changed: The Daimlers remain staunch believers in real estate. "If the financial pressure was off, we'd still look for opportunities to invest," says Steve. "For now, though, we just don't have the means to hang on."
The advice
The Daimlers have a few good options to help them get back on track, says the team of experts Money recruited to help them. Here are their recommendations.
Make local connections. Steve needs to land a good job quickly and has already reached out to former business associates in Virginia. But since he now lives in Florida, he should also work on developing professional contacts in his new home state, says Russ Jones, president of First Transitions, a Chicago career counseling firm.
He suggests Steve join a couple of local networking groups, such as the Glazer Kennedy Inner Circle for sales professionals and Execunet, an online executive-recruitment firm that holds meetings in nearby Orlando. Steve should also ask his Virginia contacts if they know of any jobs in Florida.
Sell the vacation home. To alleviate their cash shortage and help rebuild their savings, Michael Cirino, a financial planner with Lincoln Financial Group in Jacksonville, Fla., urges the Daimlers to sell their beach house in the Outer Banks. Probable net: $650,000. But while Steve is open to the idea, Carol is reluctant. "I have an emotional attachment to that home," she says, "and I don't want to make any more fast decisions."
Institute bargain pricing. To expedite the sale of their investment properties, Greg Antonich, a Daytona Beach real estate agent, urges the Daimlers to cut the prices to at least 5 percent less than those of other homes for sale in the area. To bring in more prospects, he also suggests offering incentives, such as paying half of a buyer's closing costs.
Spread the wealth. The Daimlers have too much of their net worth tied up in real estate and low-growth cash investments, Cirino says. He suggests creating a more balanced portfolio by shifting most of the money left in their retirement account out of money markets and into stock and bond funds. The planner urges the couple to pay off their credit cards and start rebuilding their savings as soon as Steve starts working.
Consider what lies ahead. Within the next couple of years, both Daimlers will be eligible to take early Social Security benefits, which would give them an additional $32,000 a year in income. That means Steve may not need to work for as long as he thinks, says Cirino. One drawback: Taking benefits ahead of their full retirement age of 65 will permanently reduce their take by about 20 percent.
After hearing the experts' advice, the Daimlers feel relieved. While their life in Florida isn't what they imagined, they now know that they have options to ease their financial crunch.
They're determined to unload their investment properties, even if it means taking a loss. And once they have a cash cushion from the sale, they're looking forward to doing all the activities they haven't had time for, like going boating with friends and traveling to Europe.
"We want to enjoy the last third of our life," says Steve. "And now we finally see ways that we can."
Original Article

US ACCUSED OTHERS FOR OWN OVERSPENDING

US ACCUSED OTHERS FOR OWN OVERSPENDING

The United States military budget for 2007, the budget was raised to a total of US$ 532.8 Billion.

A U.S. trade deficit with China is only $232.5 billion last year.

US government is trying to misguide their voters but also tax more from their pocket.  

Military budget of the United States

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The United States military budget is that portion of the United States discretionary federal budget that is allocated for the funding of the Department of Defense. This military budget finances employee salaries and training costs, the maintenance of equipment and facilities, support of new or ongoing operations, and development and procurement of new equipment. The budget includes funding for all branches of the military: Army, Navy, Air Force, Marine Corps, and Coast Guard.
For 2007, the budget was raised to a total of US$ 532.8 Billion.^[1] This does not include many military-related items that are outside of the Defense Department budget, such as nuclear weapons research, maintenance and production (which is in the Department of Energy budget), Veterans Affairs or the wars in Iraq and Afghanistan (which are largely funded through extra-budgetary supplements, e.g. $120Bi in 2007).^[2]

Budget for 2007 ^[3]

The military expenditure of the United States Department of Defense for fiscal year 2007 is:

Total Funding	$429.3 Billion	+6.9%
Operations and maintenance	$152.0 Bil.	+6.6%
Military Personnel	$110.8 Bil.	+3.7%
Procurement	$84.2 Bil.	+10.5%
Research, Development, Testing & Evaluation	$73.2 Bil.	+3.1%
Military Construction	$12.6 Bil.	+57.5%
Family Housing	$4.1 Bil.	+2.5%
Working Capital Funds	$2.4 Bil.	+9.1%

Further the Department of Energy will spend an additional $23.4 Bil. during FY'07 for the development, maintenance and production of nuclear warheads. ^[4]

Military spending relative to other countries

A comparison of the budgets for the world's greatest military spenders. Note that this comparison is done in nominal value US dollars and thus is not adjusted for purchasing power parity]] The current (2005) United States military budget is larger than the military budgets of the next fourteen biggest spenders combined, and over eight times larger than the official military budget of China. The United States and its close allies are responsible for approximately two-thirds of all military spending on Earth (of which, in turn, the US is responsible for the majority). Military spending accounts for more than half of the United States' federal discretionary spending, which is all of the U.S. government's money that is not used for pre-existing obligations.^[5]
According to the Stockholm International Peace Research Institute, in 2003 the United States spent approximately 47% of the world's total military spending of US$910.6 billion.
Aa percentage of its GDP, the United states spends 3.7% on military. This is higher than France's 2.6%, and lower than Saudi Arabia's 10%.^[6] This is historically low for the United States since it peaked in 1944 at 37.8% of GDP. Even during the peak of the Vietnam War the percentage reached a high of 9.4% in 1968.^[7]
Because the U.S. GDP has risen over time, the military budget can rise in absolute terms while shrinking as a percentage of the GDP. For example, according to the Center for Defense Information, the US outlays for defense as a percentage of federal discretionary spending, has from Fiscal Year 2003 consumed more than half (50.5%) of all such funding and has risen steadily.^[8] Discretionary spending accounts for approximately 1/3 of all federal outlays[2]. Therefore, comparing nominal dollar values of military spending over the course of decades fails to account for the impact of inflationary forces, for which military spending as a percentage of GDP does account.
The recent invasions of Iraq and Afghanistan are funded outside the Federal Budget (through supplementary spending bills), so they are not included in the military budget figures listed above.^[9] In addition, the United States has black budget military spending which is not listed as Federal spending and is not included in published military spending figures. Other military-related items, like maintenance of the nuclear arsenal and the money spent by the Veterans Affairs Department, are not included in the official budget. Thus, the total amount spent by the United States on military spending may be considered higher, if one considers these other expenses to be military spending.

No China-U.S. currency deal

The most contentious issue goes unresolved during the final day of trade talks. Progress is reported in other areas.

From the Associated Press

May 24, 2007

WASHINGTON — The United States and China concluded high-level trade talks Wednesday with progress reported in a few areas but no breakthrough in the biggest dispute, China's currency.

Treasury Secretary Henry M. Paulson Jr. and Chinese Vice Premier Wu Yi sounded positive notes on the importance of the new high-level discussions.

But the scant signs of success left China's critics vowing to push ahead with legislation seeking to punish China for what are seen as unfair trading practices that have driven U.S. trade deficits to record levels and cost thousands of American manufacturing jobs.

Hoping to head off punitive legislation, Wu and other members of her team — the largest high-level Chinese delegation ever to visit the U.S. — met behind closed doors with congressional leaders after the talks with members of President Bush's Cabinet had concluded.

Wu, speaking through an interpreter, said her discussions with House Speaker Nancy Pelosi (D-San Francisco), Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) and other House leaders Wednesday were "very good," but she provided no details.

Rangel said the Chinese told the lawmakers that they needed more time to implement reforms such as overhauling their currency system. He said his committee planned to move forward with legislation. Some of the bills being considered would impose stiff penalties on Chinese imports for what critics say are unfair trade practices.

Paulson headed a U.S. team that included 18 Cabinet members and other top economic officials, Federal Reserve Chairman Ben S. Bernanke among them. Wu's team included 17 top Chinese government officials.

They were participating in the second round of Strategic Economic Dialogue talks after an initial session that was held in December in Beijing. The talks will take place twice a year and are designed to address economic tensions between the countries in light of a U.S. trade deficit with China that hit an all-time high of $232.5 billion last year.

Agriculture Secretary Mike Johanns said the U.S. raised the issue of food safety, which has been highlighted by such incidents as the deaths of pets that had eaten pet food made with tainted wheat gluten imported from China, and more meetings were planned.

The two countries agreed to more than double the number of daily passenger flights between the nations by 2012, going from 10 to 23.

Cargo flights were also increased. However, the gains fell short of the openings the administration had hoped to achieve.

In the area of financial services, China agreed to a slight expansion in business opportunities for U.S. financial service companies but not the lifting of the caps on foreign ownership of banks, securities firms and insurance companies that U.S. firms had sought.

This was a setback for Paulson, former head of investment giant Goldman Sachs Group Inc., who personally lobbied Wu on this issue during a dinner at his home Monday night.

"For years, we have heard vague assurances of greater market access for American financial institutions, but they rarely seem to become reality from China," said a disappointed Sen. Charles E. Schumer (D-N.Y.).

There was also agreement for closer cooperation in the area of increasing use of environmental technology but no announcement that China would cut its tariffs to increase sales of U.S. energy and environmental products in China. Such an announcement had been expected.

China also rejected U.S. requests that it accelerate the revaluing of its currency, the yuan, which American manufacturers contend is undervalued by as much as 40%, making Chinese products cheaper for Americans and American goods more expensive in China.

http://www.latimes.com/business/la-fi-chitrade24may24,1,5217632.story?coll=la-headlines-business&ctrack=1&cset=true

Warren Buffett, Himself

Warren E. Buffett

Born:	August 30, 1930 (1930-08-30) (age 76) Omaha, Nebraska, USA
Occupation:	CEO, Berkshire Hathaway, investor, philanthropist
Salary:	US$100,000 (2006) [1]
Net worth:	US$52 billion (2007) [2]
Spouse:	Susan Buffett (1952-2004), Astrid Menks (2006-)
Children:	Howard Graham Buffett, Peter Buffett, Susie Buffett
Website:	berkshirehathaway.com

Historical timeline

Education: Woodrow Wilson High School, Washington D.C. in 1947 The Wharton School, University of Pennsylvania, 1947-1949 B.S. University of Nebraska, 1950 M.S. in Economics, Columbia University, in 1951. Employment: 1951-1954 Buffett-Falk & Co., Omaha - Investment Salesman 1954-1956 Graham-Newman Corp., New York - Securities Analyst 1956-1969 Buffett Partnership, Ltd., Omaha - General Partner 1970-Present Berkshire Hathaway Inc, Omaha - Chairman, CEO

1943: (13 years old)

• Buffett filed his first income tax return, deducting his bicycle as a work expense for $35.

1945: (15 years old)

• In his senior year of high school, Buffett and a friend spent $25 to purchase a used pinball machine, which they placed in a barber shop. Within months, they owned three machines in different locations.

1950: (20 years old)

• Buffett enrolled at Columbia Business School after learning that Benjamin Graham and David Dodd, two well-known securities analysts, taught there.

• During this time, Buffett also pledged to the Alpha Sigma Phi fraternity. He is still active today, donating every year to the fraternity.

1951: (21 years old)

• Buffett discovered Graham was on the Board of GEICO insurance at the time. After taking a train to Washington, D.C. on a Saturday, Buffett knocked on the door of GEICO's headquarters until a janitor allowed him in. There, he met Lorimer Davidson, the Vice President, who was to become a lasting influence on him and life-long friend.^[12]
• Buffett graduated from Columbia and wanted to work on Wall Street. Buffett offered to work for Graham for free but Graham refused. He purchased a Texaco gas station as a side investment, but that venture did not work out as well as he had hoped. Meanwhile, he worked as a stockbroker. During that time, Buffett also took a Dale Carnegie public speaking course. Using what he learned, he felt confident enough to teach a night class at the University of Nebraska, "Investment Principles." The average age of the students he taught was more than twice his own.

1952: (22 years old)

• Buffett married Susan Thompson.

1954: (24 years old)

• Benjamin Graham offered Buffett a job at his partnership with a starting salary of $12,000 a year. Here, he worked closely with Walter Schloss.
• Susan had her second child, Howard Graham Buffett.

1956: (26 years old)

• Benjamin Graham retired and folded up his partnership.
• Buffett's personal savings are now over $140,000.
• Buffett returned home to Omaha and created Buffett Associates, Ltd., an investment partnership.

1957: (27 years old)

• Buffett had three partnerships operating the entire year.
• Buffett purchased a five-bedroom, stucco house on Farnam Street for $31,500.
• Susan was about to have her third child.

1958: (28 years old)

• Buffett had five partnerships operating the entire year.

1959: (29 years old)

• Buffett had six partnerships operating the entire year.
• Buffett was introduced to Charlie Munger.

1960: (30 years old)

• Buffett had seven partnerships operating the entire year.
• Buffett asks one of his partners, a doctor, to find ten other doctors who will be willing to invest $10,000 each into his partnership. Eventually, eleven doctors agreed to invest.

1961: (31 years old)

• Buffett had seven partnerships operating the entire year.
• The partnerships were: Buffett Associates, Buffett Fund, Dacee, Emdee, Glenoff, Mo-Buff, and Underwood.
• Buffett revealed that Sanborn Map Company accounted for 35% of the partnerships' assets.
• Buffett explained that in 1958, Sanborn sold at $45 per share when the value of the Sanborn investment portfolio was $65 per share. This meant buyers valued Sanborn at "minus $20" per share, and buyers were unwilling to pay more than 70 cents on the dollar for an investment portfolio with a map business thrown in for nothing.
• Buffett reveals that he earned a spot on the board of Sanborn.

1962: (32 years old)

• Buffett's partnerships, in January 1962, had in excess of $7,178,500 of which over $1,025,000 belonged to Buffett.
• Buffett merges all partnerships into one partnership.
• Buffett discovered a textile manufacturing firm, Berkshire Hathaway. Buffett's partnerships began purchasing shares at $7.60 per share.

1965: (35 years old)

• When Buffett's partnerships began aggressively purchasing Berkshire they paid $14.86 per share while the company had working capital (current assets minus liabilities) of $19 per share, this did not include the value of fixed assets (factory and equipment).
• Buffett took control of Berkshire Hathaway at the board meeting and named a new President, Ken Chace, to run the company.

1966: (36 years old)

• Buffett closes the partnership to new money.
• Buffett wrote in his letter “unless it appears that circumstances have changed (under some conditions added capital would improve results) or unless new partners can bring some asset to the partnership other than simply capital, I intend to admit no additional partners to BPL.”
• In a second letter, Buffett announced his first investment in a private business — Hochschild, Kohn, and Co, a privately owned Baltimore department store.

1967: (37 years old)

• Berkshire paid out its first and only dividend of 10 cents.

1969: (39 years old)

• Following his most successful year, Buffett liquidated the partnership and transferred their assets to his partners. Among the assets paid out were shares of Berkshire Hathaway.

1970: (40 years old)

• As chairman of Berkshire Hathaway, began writing his now-famous annual letters to shareholders.

1973: (43 years old)

• Berkshire began to acquire stock in the Washington Post Company. Buffett became close friends with Katharine Graham, who controlled the company and its flagship newspaper, and became a member of its board of directors.

1979: (49 years old)

• Berkshire began to acquire stock in ABC. With the stock trading at $290 per share, Buffett's net worth neared $140 million. However, he lived solely on his salary of $50,000 per year.
• Berkshire began the year trading at $775 per share, and ended at $1,310. Buffett's net worth reached $620 million, placing him on the Forbes 400 for the first time.

1988: (58 years old)

• Buffett began buying stock in Coca-Cola Company, eventually purchasing up to 7 percent of the company for $1.02 billion. It would turn out to be one of Berkshire's most lucrative investments, and one which it still holds.

2002: (72 years old)

• Buffett entered in $11 billion worth of forward contracts to deliver US dollars against other currencies. By April 2006, his total gain on these contracts was over $2 billion.

2006: (75 years old)

• Buffett announced in June that he would give away more than 80%, or about $37 billion, of his $44 billion fortune to five foundations in annual gifts of stock, starting in July 2006. The largest contribution will go to the Bill and Melinda Gates Foundation.

2007: (76 Years old)

• In a letter to shareholders, Buffett announced that he was looking for a younger successor or perhaps successors to run his investment business.[14] Buffett had previously selected Lou Simpson, who runs investments at Geico, to fill that role. However, Simpson is only six years younger than Buffett.