Bill Gates has learned countless lessons from his friendship with Warren Buffett, from investing to time management. Together they co-founded The Giving Pledge which encourages wealthy individuals to donate a portion of their fortune, as well as playing golf and bridge together.
Research demonstrates the value of cultivating meaningful friendships, but keeping those bonds intact over time can be challenging.
The First Meeting
Warren Buffett is well known for being extremely generous with his fortune, giving billions away to various causes he cares about. Investors throng to Berkshire Hathaway annual meetings each year; bidding at auction for lunch with Buffett often tops multi-millions dollars; while his annual letters to shareholders provide insights into his investing philosophy that are eagerly read.
At first meeting on Fourth of July weekend 1991, Gates had doubts that Buffett and Bill Gates would become close and form close philanthropic partnerships. Even during that first encounter between them on July 4, he did not think the two shared many commonalities.
Melinda French Gates and Bill Gates had already given away billions to public health and education initiatives and combat global poverty when they established their foundation in 1994, as well as creating The Giving Pledge -- an initiative encouraging wealthy individuals and families to give away most of their fortunes in philanthropic efforts.
At that time, Gates was an accomplished computer scientist attempting to improve human-computer interaction while also exerting great effort into creating the Windows operating system. Aside from being intelligent and accomplished, he also enjoyed reading books and playing bridge.
Gates and Buffett hit it off immediately despite their seemingly different backgrounds, having much in common and continuing their correspondence despite living more than 2,000 miles apart.
Buffett had long been a value investor, guided by his mentor Benjamin Graham (deceased). Buffett made money buying underpriced stocks and holding on for long term gains; along with partner Charlie Munger they formed Berkshire Hathaway into one of the world's leading conglomerates companies.
But it wasn't until the 1990s that Gates and Buffett became close friends. Early in their friendship, Gates was focused on his work and protective of his privacy; therefore he wasn't interested in spending much time outside his immediate circle - being content in Omaha with friends he'd known over time.
The Second Meeting
Billionaires have long understood the significance of strong friendships as essential components to both happiness and success. Studies show that spending time with close relationships can boost mental resilience and self-esteem while keeping these ties going has been associated with improved heart health, so both have made sure to remain in contact and spend quality time together despite their busy lives.
Microsoft co-founder Paul Allen often meets Warren Buffett for annual meetings at his Omaha home, where they play games such as bridge and table tennis. Last year, however, these two moguls decided to accept a challenge by playing an epic ping-pong match against 11-year-old Ariel Hsing of the U.S. Olympic ping-pong team - winning every match including beating numerous competitors such as Buffett! Hsing even won all 24 matches without ever dropping one!
Buffett has long been an avid supporter of the Gates Foundation, which has committed $54.8 billion toward fighting poverty, disease, and inequality worldwide. Since 2006 he has donated shares worth $41.5 billion from Berkshire Hathaway Class B stock to this cause as well as three other philanthropies.
Buffett announced his generosity through a letter sent to the foundation. In it he detailed his pledge to donate Berkshire shares annually during his life and to ensure they continue after death through wills. Furthermore, Buffett pledged that upon death his entire estate -- estimated at over $90 billion -- would go toward charity donations.
Media reports in recent weeks indicate that the Gates Foundation may be mismanaged and Warren Buffett's commitment to continue his philanthropy isn't enforceable; for example, ProPublica found that Buffett was practicing what it termed "absent-father philanthropy", in which he writes checks out to help people.
Investigation results have also identified that the foundation's tax-exempt status could be threatened due to its lack of transparency; however, state attorney general are unlikely to intervene without evidence of wrongdoing or fraud; Buffett has not commented publicly on allegations; in his letter sent directly to the foundation he suggests that his resignation as trustee might speed up management changes more efficiently.
The Third Meeting
Since their meeting three decades ago, this duo has collaborated on political and philanthropic ventures while serving as mentors to each other and serving as role models to many of the world's richest individuals.
But their partnership hasn't been without problems. Buffett's decision to step down from the board of Bill and Melinda Gates Foundation, with an estimated net worth of $60 billion, stands out.
Buffett expressed regret in a letter addressed to his foundation that he had practiced "philanthropy as an absent father-writing checks instead of engaging in hands-on work like tutoring children or aiding elderly.
He then addresses some of the challenges faced by the foundation and urges others to join him in supporting its mission. One such challenge is a shrinking pool of billionaires; over the last decade, their percentage who have given away significant portions of their wealth has decreased drastically; another concern is competition from private charities which focus on specific causes or geographic regions.
The most serious issue relates to his refusal of the Gates Foundation investing in companies which pay CEOs less than minimum wage - this represents an indirect challenge against Republic Services, an investment with whom Teamsters play an instrumental role financially, as well as being part of their workforce and thus an employee of his foundation.
Additionally, the foundation has made several controversial donations to groups that advocate abortion on demand, helping fund protests at Supreme Court Justice homes as well as funneling more than $4 billion through The Susan Thompson Buffett Foundation which acts as "advocacy disguised as philanthropy." Whether or not Buffet will donate all his committed Berkshire Hathaway shares worth nearly $60 billion before his death is still unknown as its most recent audit shows only half have been given away so far; according to plans set forth for annual contributions.
The Fourth Meeting
Buffett, who is 93, and Gates 68, have been longtime friends for 30 years. Through business ventures that turned philanthropic, they have assisted countless people worldwide. Together they launched The Giving Pledge campaign encouraging other rich individuals to donate much of their wealth towards charitable efforts.
Berkshire Hathaway's annual meeting draws crowds of investors eager to hear from world's wealthiest person and ask him questions, while an annual charity auction for lunch with him typically fetches multi-million-dollar bids.
Though they differ professionally -- Buffett is an investor, while Gates founded Microsoft with the intent of making computers more useful to businesses and individuals -- they do share many similar interests socially. Both men have participated in activities together from newspaper-tossing contests to eating See's candies owned by Berkshire; as well as working out together at local gyms.
These two have engaged in several charitable endeavors together, from organizing a charity race and performing a Broadway musical, to teaming up to play online bridge against one another; two highly esteemed games which they both excel at playing against each other.
Recently, their views seem to have diverged on how best to approach philanthropy. Buffett recently wrote to his Foundation board members and mildly chastised himself for practicing "philanthropy as a sort of absentee father, writing checks rather than engaging in hands-on work such as tutoring children or helping the elderly."
At the same time, Gates has found himself embroiled in several controversies. A ProPublica investigation discovered that Gates and other wealthy Americans pay only one-tenth of the income tax due to them; his sanitation giant Republic Services is facing a class-action lawsuit from Teamsters union wanting it to redirect profits back into worker pay; while just last week he put his family charitable foundation endowment manager on leave following allegations of inappropriate behavior toward women.
