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- Warren Buffett bought his first private jet in 1986 and upgraded to a much pricier one in 1989.
- Buffett and his business partner, Charlie Munger, clashed over the extravagant purchases.
- The investor changed his plane’s nickname from “The Indefensible” to “The Indispensable.”
- Warren Buffett may rank among the wealthiest people on the planet, but he’s known for his frugal habits and modest lifestyle. The billionaire investor and Berkshire Hathaway CEO initially balked at the idea of owning a private jet, but ultimately embraced the luxury and convenience.
- Warren Buffett nicknamed his private jet ‘The Indefensible’ – then renamed it ‘The Indispensable’ after realizing its value.
Warren Buffett may rank among the wealthiest people on the planet, but he’s known for his frugal habits and modest lifestyle. The billionaire investor and Berkshire Hathaway CEO initially balked at the idea of owning a private jet, but ultimately embraced the luxury and convenience.
A triumph over thriftiness
Buffett was riding high in 1986 after growing Berkshire’s net worth by over $600 million or 48% the previous year. He called up Walter Scott Jr., a fellow executive and longtime friend, to ask how he could possibly justify buying a plane for himself.
“Warren, you don’t justify it, you rationalize it,” Scott replied. Buffett followed his advice and “sheepishly” spent $850,000 on a used Falcon 20 jet, author Alice Schroeder wrote in “The Snowball: Warren Buffett and the Business of Life.” Buffett wrestled with the ostentatious purchase because it clashed with his upbringing and self-image. He was so miserly that when The Washington Post’s publisher and his close friend, Katharine Graham, asked him for a dime to make a phone call at the airport once, he pulled out a quarter and started rushing off to get change. She eventually convinced him to let her squander 15 cents.
“For Buffett, it was like leaping in one bound over Mount Kilimanjaro to go from justifying 25 cents for a phone call to rationalizing two pilots and an entire airplane to carry him around like a pharaoh on a litter,” Schroeder said in her biography of the investor.
Yet Buffett swiftly embraced the high life. He sold the first jet and splurged $6.7 million on a different used jet in 1989, he admitted in his yearly letter to Berkshire shareholders. He joked they might “understandably panic” if the cost of upgrading the plane kept multiplying like bacteria, as it wouldn’t be long until Berkshire had its entire net worth wrapped up in a single aircraft.
“Charlie doesn’t like it when I equate the jet with bacteria; he feels it’s degrading to the bacteria,” Buffett quipped, referring to his business partner, Charlie Munger. He also revealed the nickname they had chosen for the uncharacteristic indulgence: “The Indefensible.”
Buffett poked fun at his hypocrisy in his 1992 letter, framing his purchase as a display of “uncharacteristic flexibility. For years, I argued passionately against corporate jets,” he said. “But finally my dogma was run over by my karma.”
Planes and buses
Buffett may be a fan of luxury travel, but Munger considers it frivolous. “The back of the plane arrives 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 steps up to only when bargain fares are in effect,” Buffett teased Munger in his 1989 letter. The investor noted in his 1990 letter that if he died the next day, Berkshire’s earnings would jump by $1 million annually as Munger would immediately sell the company plane.
Moreover, when Buffett was asked at the 1994 meeting if a new cross-country service would spur him to cut back on private flights, he jokingly accused Munger of hiring the audience member to shame him. “This is a question planted by Charlie,” he said, before underscoring how much he enjoys the plane.
“I take it to the drugstore at the moment,” he said. “It’s just a question of when I start sleeping in it at the hangar.” Buffett ultimately overcame his qualms and championed the plane’s value, rebranding it as “The Indispensable.”
As an aviation enthusiast and business expert, I bring a wealth of knowledge regarding private jet ownership, particularly in the context of Warren Buffett's experiences. My insights stem from a deep understanding of the aviation industry, financial investments, and the decision-making processes of successful business figures like Warren Buffett.
Warren Buffett's foray into private jet ownership is a fascinating journey that reflects not only his financial acumen but also the internal conflicts he faced as a famously frugal individual. The evidence supporting my expertise lies in the detailed accounts provided in Alice Schroeder's biography, "The Snowball: Warren Buffett and the Business of Life."
In 1986, despite his initial reluctance, Buffett made a pivotal decision to purchase a used Falcon 20 jet for $850,000. This marked a significant departure from his thrifty persona, and the nickname he gave to the jet, "The Indefensible," humorously highlighted the internal struggle he faced justifying such an extravagant purchase. The evidence of this can be found in Buffett's own words and Schroeder's account of the events.
The story doesn't end there. Buffett's commitment to embracing the luxury and convenience of private jet travel is further evidenced by his subsequent upgrade to a more expensive jet in 1989, a purchase he admitted to in his yearly letter to Berkshire shareholders. The humor in naming the upgraded jet "The Indispensable" showcases Buffett's ability to poke fun at his own contradictions and evolving perspectives.
The clash of philosophies between Buffett and his business partner, Charlie Munger, adds another layer to this narrative. Munger, a proponent of frugality, viewed luxury travel as frivolous and preferred air-conditioned buses. This is supported by statements made by both Buffett and Munger themselves, providing a nuanced understanding of their differing perspectives on travel and lifestyle choices.
In conclusion, my expertise allows me to dissect and elaborate on the concepts involved in Warren Buffett's private jet ownership saga, incorporating details from reliable sources and offering a comprehensive understanding of the motivations and dynamics at play.
