Warren Buffett renamed the ‘indefensible’ private jet to ‘indispensable’

  • Warren Buffett bought his first private jet in 1986 and upgraded to a much more expensive one in 1989.
  • Buffett and his business partner, Charlie Munger, clashed over the extravagant purchases.
  • The investor changed the nickname of his plane from “The Indefensible” to “The Indispensable”.

Warren Buffett may rank among the richest people on the planet, but he is known for his frugal habits and modest lifestyle. The billionaire investor and CEO of Berkshire Hathaway initially balked at the idea of ​​owning a private jet, but eventually embraced luxury and convenience.

A triumph over the economy

Buffett was riding high in 1986 after increasing Berkshire’s net worth by more than $600 million or 48% the previous year. He called Walter Scott Jr., a fellow executive and longtime friend, to ask how he could justify buying a plane for himself.

“Warren, you don’t justify it, you rationalize it,” Scott replied. Buffett took his advice and “timidly” spent $850,000 on a used Falcon 20 jet, author Alice Schroeder wrote in “The Snowball: Warren Buffett and the Business of Life.”

Buffett struggled with conspicuous buying because it clashed with his upbringing and self-image. He was so stingy that when the editor of The Washington Post and his close friend, Katharine Graham, asked him for a penny to make a call at the airport one time, he took out a quarter and started rushing to get change. She finally convinced him to let her waste 15 cents.

“For Buffett, it was like leaping over Mount Kilimanjaro to go from justifying 25 cents for a phone call to streamlining two pilots and an entire plane to ferry him around like a pharaoh on a litter,” Schroeder said in his investor bio.

Still, Buffett quickly embraced the high life. He sold the first jet and spent $6.7 million on another used jet in 1989, he admitted in his annual letter to Berkshire shareholders. He joked that they might “understandably freak out” if the cost of the plane upgrade continued to multiply like bacteria, because it wouldn’t be long before Berkshire had all of its net worth in one. plane.

“Charlie doesn’t like it when I equate jet to bacteria; he feels like it degrades for bacteria,” Buffett joked, referring to his business partner, Charlie Munger. He also revealed the nickname they had chosen for this unusual indulgence: “The Indefensible”.

Buffett poked fun at his hypocrisy in his 1992 letter, describing his purchase as a display of “unusual flexibility.”

“For years I have fought passionately against business jets,” he said. “But eventually my dogma was crushed by my karma.”

Planes and buses

Buffett may be a fan of luxury travel, but Munger views it as frivolous.

“The back of the plane comes in at the same time as the front of the plane, invariably,” Berkshire’s vice chairman said at the 1994 shareholder meeting.

“His idea of ​​traveling in style is an air-conditioned bus, a luxury he only offers when great fares are in effect,” Buffett Munger teased in his 1989 letter.

The investor noted in his 1990 letter that if he died the next day, Berkshire’s revenue would increase by $1 million a year because Munger would immediately sell the company’s aircraft.

Moreover, when Buffett was asked at the 1994 reunion if a new service across the country would prompt him to cut private flights, he jokingly accused Munger of hiring the viewer to shame him.

“That’s a question from Charlie,” he said, before emphasizing how much he enjoys the plane.

“I’m taking it to the pharmacy right now,” he said. “It’s just a matter of when I start sleeping in it at the shed.”

Buffett eventually overcame his qualms and defended the plane’s value, renaming it “The Indispensable.”

Read more: ‘Richer, Wiser, Happier’ author William Green breaks down the 3 key traits that fueled Warren Buffett’s success and explains why they’re so important to investors

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