1. Using the return on capital figure he achieved for shareholders through 2007 as a proxy, the author estimates that Buffett (not including Susie’s shares) would have been worth between $71 and $111 billion by the end of 2007 had he continued to charge his “partners” fees. Susie’s stake would have been worth another $3.7–$5 billion. The difference between the high and low range is the fee structure (Buffett’s former 25% plus 6% interest on capital to all partners—the high number—vs. the 2%/20% structure of most hedge funds today—the low number). The calculation assumes that Buffett took out the equivalent of his 6% a year for living expenses, as he typically did while running the partnership. That amounts to $1 million per year by 2007. His and Susie’s (really Susie’s) living expenses exceeded this by a wide margin; however, Buffett’s personal investments—not part of Berkshire—also compounded at an astonishing rate and could (and did) fund Susie’s lifestyle without further withdrawals from Berkshire.
2. Interview with Charlie Munger.