Warren Buffett's unique Christmas gift and the lesson of money making money

(Dan Tri) - Buffett once gave away $10,000 in cash during the holidays, but when he saw it "evaporate" quickly, he switched to stocks - a gift that contains a lifelong investment philosophy.

In the financial world , Warren Buffett is not only a living legend with an estimated fortune of more than 150 billion USD but also a great teacher of money management thinking. The story of how he gave Christmas gifts to his family, recently revealed by his ex-daughter-in-law Mary Buffett, has become an interesting practical lesson about the difference between consumer thinking and asset thinking.

According to Mary Buffett, who was married to Peter Buffett (Warren Buffett's youngest son), in the past, Christmas in this billionaire family always came with a thick envelope. The Berkshire Hathaway chairman often gave each family member $10,000 in cash. The crisp, ink-scented $100 bills were a gift that anyone would wish for.

The problem, however, lies in how the recipients use it. “As soon as we get home, we spend it all, very quickly,” Mary admitted in an interview.

For many people, $10,000 is a large sum of money to spend on shopping, traveling , or enjoying life. But in the eyes of a value investor like Warren Buffett, "burning" money on frivolous things that lose value over time is a terrible waste of resources.

He realized that by continuing to give away cash, he was indirectly encouraging short-term spending habits instead of building a sustainable financial foundation.

Warren Buffett is famous for his superb investment skills (Photo: Getty).

Strategic U-turn: Give the fishing rod instead of the fish

The change came one Christmas, when the familiar envelope no longer contained cash. Instead, it contained a letter with an announcement: He had bought each of them $10,000 worth of stock in a company he had just invested in (like the Coca-Cola Trust or later Wells Fargo). Along with the gift was a typical Buffett admonition: “You can sell it for cash now, or keep it.”

This is a classic financial psychology test. If they sell now, they still have $10,000 to spend as usual. But if they keep it, they become shareholders, enjoying the dividends and growth in the value of the asset over time.

Mary Buffett, perhaps imbibing her father-in-law's thinking, chose option 2. "I thought, these stocks are worth more than $10,000. So I kept them and their value just kept increasing," she said.

This decision has proven to be wise. Take Wells Fargo, one of the stocks Buffett gifted. According to updated data, the stock has grown more than 200% over the past five years. This year alone, it has maintained an impressive growth of nearly 22%. If Mary had sold those shares to buy a handbag or luxury goods, the value of the item would have been halved. But by holding on to the stock, her assets have multiplied many times over.

Moreover, this gift has triggered the recipient's investment mindset. Mary said that later, whenever Mr. Buffett bought a stock, she also used her own money to buy it because she believed in his vision. From a passive gift recipient, she became an active investor.

The problem of giving gifts to billionaires and the meaning of independence

The story is even more interesting in the other direction: What would you give a 95-year-old man who owns more than 150 billion USD and can buy anything in the world?

The Buffett family also struggled with this question. And Mary Buffett's answer once again showed the sophistication in financial thinking. She realized that the most precious gift to Warren Buffett was not material things, but peace of mind about the next generation.

Instead of buying an expensive gift, Mary gave him the balance sheet of the music company she was running. "I didn't know what to buy him, so I decided to show him that we were making money, that the company was profitable," she shared.

For a seasoned investor, seeing his children become independent, build solid careers and manage their finances is the greatest “return” of his life. It proves that the lessons and core values ​​he imparted have been followed.

The "Great Transfer of Wealth" Trend: Cash or Stocks?

The Buffett story is not only an anecdote of the super-rich but also reflects a major trend taking place globally: the "Great Wealth Transfer" wave.

According to a report from UBS, an estimated $83 trillion will be transferred from older generations to younger generations over the next 20-25 years. Data from SunLife (UK) also shows that the trend of giving cash is popular, with an average of more than $40,000 for special occasions or home purchase assistance.

However, Warren Buffett's approach raises a big question for modern parents: Should we give our children "cash" to solve immediate needs such as buying a house, repairing a door, or consuming, or should we give them investment assets such as stocks, gold, and real estate to teach them about compound interest and long-term thinking?

In times of inflation and economic volatility, cash tends to lose value, while quality assets tend to outperform. Giving stocks or financial instruments is not only about giving material value, but also about giving a practical financial education lesson.

From a $10,000 envelope that was wiped out in a flash to a portfolio that grew hundreds of percent, Warren Buffett's Christmas story is the clearest testament to the philosophy: "Don't save what's left after spending, spend what's left after saving."

This holiday season, instead of expensive consumer goods, perhaps a savings account, a gold bar or a few potential stock codes will be "unique" gift suggestions that bring lasting value for your loved ones.

Source: https://dantri.com.vn/kinh-doanh/mon-qua-giang-sinh-doc-la-cua-warren-buffett-va-bai-hoc-tien-de-ra-tien-20251203161124985.htm