Berkshire Hathaway Investment Plan – 2nd Anniversary

That pocket change just keeps piling up.

As a demonstration to show how small amounts of money can turn into larger amounts of money (i.e. the power of compounding), in April of 2014 I created a portfolio that consists exclusively of Berkshire Hathaway stock.  The rules are:

  • Only investments in Berkshire Hathaway stock can be made
  • The capital must come from my “lunch money” alloted in the OMM family budget
  • Loyal3 or a similar fee-free platform should be used, since brokerage fees on small deposits would significantly eat up capital

Now, two years later, the results are starting to become meaningful.  The portfolio amount is now up to over $560.


The vast majority of this is contributions, not investment gains, just to be clear.  So far I’ve invested $531 into Berkshire stock.  So, that’s a roughly 2.7% annual rate of return.  Nothing to write home about, but also nothing to really take note of either, with a time horizon of only 24 months.  I imagine over a 5-10 year period the amount of gains in the account will start to be significant, if history is any guide.

In related news, I got my first physical copy of the Berkshire Hathaway annual report mailed to me this year.  I haven’t yet gone through it in its entirety, but the first dozen pages or so were interesting; essentially a good reminder of the businesses Berkshire Hathaway owns and how they make money.  You know, typical Buffet stuff.

Although there’s no way I would have been able to make it to the annual shareholder’s meeting in Omaha this past weekend, it was kind of nice to get the shareholder credentials in the mail with the annual report and see them.  Hopefully one day I’ll get to go before Buffet or Munger passes away.  Then again, people have been saying they’ve been on their last legs for years now, but they both seem to be in good health.  We’ll have to see though – in the meantime I’ll just keep learning about the businesses that Berkshire owns and slowly collecting more ownership with my pocket money.