April 14, 2025

— Warren Buffett

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Do it when you're young

Here’s an odd detail about Warren Buffett. I think it explains a lot about his childhood and his lifetime of financial success.

We’ll let Buffett explain it himself, as he did in the 1995 Berkshire Hathaway shareholder letter:

Assuming this streak has continued ever since, we would now be up to 79 years, dating back to when Buffett was just 13 years old and his income came from delivering newspapers.

On that first return, he explained, he took a $35 deduction for the cost of his bicycle. His total tax due was $7.

“I sent my check to the Treasury and it–without comment–promptly cashed it,” Buffett later wrote, continuing the story about his old Form 1040. “We lived in peace.”

As a result of having all those old returns, Buffett can relate his financial history over the decades with great precision, including the dates on which he first bought and sold shares of the firm he calls “my first business love,” the insurance company, Geico.

His first such purchase: 1951, during which he bought Geico shares four times.

This was not long after Buffett learned that his mentor and near-hero, Benjamin Graham, was the company’s chairman, and took an impromptu train ride to Washington to visit the company. He convinced a janitor to let him inside on a Saturday and wound up talking for hours with a company executive who later became CEO.

Alas, back then Buffett was less committed to long-term investing than he later became. The following year he sold all his Geico shares for $15,259, the equivalent of about $149,000 today.

Not a bad haul for a 21-year-old at the time, but as Buffett related, over the next 20 years that fairly small stake would have grown to about $1.3 million. (You probably already know this, but Berkshire Hathaway now owns 100 percent of Geico.)

Now, I think this story about keeping old documents for decades is worthy as a bit of Buffett trivia. But, there are also a couple of good takeaways.

The first has to do with how habits we develop as children–especially business and financial habits and entrepreneurial aspirations–can endure into adulthood.

I’ve shared before how Buffett credits a 1936 book called One Thousand Ways to Make $1,000 with first inspiring him to think about business when he was 7 years old.

That’s right around when he began what he’s referred to as his “excursion into high-margin retailing,” namely buying six-packs of Coca-Cola bottles from his grandfather’s grocery store for 25 cents, and selling them around the neighborhood for 5 cents each.

The second takeaway has to do with how things we record get measured, and then how things we record improve.

Compare Buffett’s habit with the official IRS advice, which says that in most cases you only need to hold onto tax records for three years after filing. (There are exceptions, which I’m omitting for brevity.)

This long trail of information is part of what informs Buffett’s decisions even today.

As a historical final note, we should point out that it seems that Buffett very likely holds the record for having held on to the most annual tax returns of any individual in the history of the United States.

There’s his age, of course (94), and the fact that he began working and making money at an early age. But there’s also the fact that it was only during World War II that the requirement of filing tax returns expanded to the broad middle class, due to the cost of the war effort.

So, unless there’s another nonagenarian out there somewhere who has also been working since he or she was 13, and who also shares Buffett’s passion for records retention, he almost certainly has more years in a row than anyone else.

Reminder, which is what made me think of all this to begin with: Today is April 15, which is Tax Day for individuals in the United States. If this whole thing has slipped your mind, here's the link for an extension form.

Oh, and we need a quote. How about this one? Buffett actually took it from the late advertising pioneer David Ogilvy, but he likes it so much, that he's shared it twice in his shareholder letters:

The unfinished second half? They can pay off when you're older.

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