Warren Buffett is undoubtedly the world's best investor at the head of Berkshire Hathaway (NYSE:BRK-A) (NYSE:BRK-B). With a net worth topping $58 billion according to Forbes, Buffett has more wealth than most could ever dream of.
But when did Buffett truly know he was going to be rich?
Buffett's first $10,000 at 21
In 1951, Warren Buffett had accumulated $10,000 at 21 years old. Adjusted for inflation, $10,000 in 1951 was the equivalent to $90,057 today. It wasn't excessive wealth by any means, but it was capital that Buffett would work tirelessly to compound.
He later said the following:
"I really knew I was rich when I had $10,000. I knew a long time ago that I was going to be doing something I loved doing with people that I loved doing it with."
By 1958, and at just 28 years old, Buffett really knew he was wealthy.
"In 1958, I had my dad take me out of the will, as I knew I would be rich anyway. I let my two sisters have all the estate."
Being wealthy got to his head
We don't hear of many Buffett mistakes. He's avoided most of them, and made only a handful. But it was at the time Buffett first cleared $10,000 that he made one really big mistake. That mistake would cost him 20% of his net worth.
Buffett now jokes about the event, saying the following to a group of business school students in 1998:
"Back when I had $10,000 I put $2,000 of it into a Sinclair Service Station which I lost, so the opportunity cost on that money is about $6 billion right now -- fairly big mistakes. It makes me feel good when my Berkshire goes down, because the cost of my Sinclair Station goes down, too."
At the same meeting with students, he said that his worst mistakes come when he has a lot of money sitting around:
"I made a mistake when I bought US Air Preferred some years ago. I had a lot of money around. I make mistakes when I get cash. Charlie tells me to go to a bar instead. Don't hang around the office. But I hang around the office and I have money in my pocket, I do something dumb. It happens every time."
Buffett's amazing foresight
What makes Buffett's story truly remarkable is that he knew he was going to be wealthy well before he was. Though having an inflation-adjusted net worth of more than $90,000 at 21 years old is a good head start, it's hardly the kind of sum you'd ever expect to grow to billions in a single lifetime.
Buffett's history is filled with successes and failures, but all in all, his robust performance in the stock market and ability to compound money has made him one of the wealthiest capitalists the world has ever seen.
Fool contributor Jordan Wathen has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.