Alien among his own: Warren Buffett and demonstrative consumption "vice versa"

Until recently, the so-called “demonstrative consumption” was common in Russia. The desire to shop for show, even if they can not afford it, is common, of course, not only among Russians. The richest people in the world are often in plain sight, they are impressed by their acquisitions, demeanor, "omnipotence". They even write books about them.

But outside the box minded individuals find idols on the other side of luxury. Interlocutor of Kommersant Elena Chirkova, who wrote the book The Warren Buffett Philosophy of Investment, is inspired by the example of Warren Buffet. Demonstrative consumption “opposite” helped him to become one of the richest people in the world.

Source: financialblog.ru
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This example calls into question the well-known formula: “To become rich, you must behave like them.” It turns out that "they" still behave very differently.

Warren Buffett is the world's largest investor, whose fortune as of March 1, 2015 was estimated at $ 72.7 billion. Buffett is the owner of Berkshire Hathaway .

Financial Times columnist Tony Jackson in 2002 called Buffett a miser: "The more carefully we look at him, the more he looks like a big local miser - a man who in his youth saves every penny, buys the next house and as a result owns the whole street."

It is often remembered that Buffett continues to live in the house that he bought in 1958 for $ 31.5 thousand (about $ 280 thousand in current prices).

His first wife testified that for many years, Buffett wore simple clothes, "until she completely wore out." His daughter told me that once she had nothing to pay for parking, her father borrowed $ 20, she had to write a check to her dad, but he was not too lazy to cash it.

"Eat what you want"

The next story is from a waiter who served Buffet during lunch at the French Cafe restaurant in Omaha. Before dinner, the visitor presented a coupon for a discount of $ 3.95 and said: "I want this to be reflected in my account." In an interview with CNBC, Buffett showed the contents of his wallet, from which he pulled out a McDonalds gold card, giving him the opportunity to eat for life in the eatery network in Omaha.

For example, in the book of aphorisms of Buffett, compiled by Janet Lowe, the phrase “I would rather take money” is placed in the section “Eat what you want,” although, of course, he hinted at the artificial overpricing of expensive wines and the unprofitability of their purchase, if the benefits consumer is limited to the quality of the drink without regard to its social aura.

Buffett also once said that French wine is an artificially created brand. “Maybe grapes from a small eight-acre vineyard in France are indeed the best in the world, but I always had a suspicion that these are 99% words and 1% drinks.” The real cost of a glass of wine is much less than its price.

“Price is what you pay, cost is what you get,” Buffett is convinced that one should not squander wealth on false and artificially introduced values ​​into consciousness.

Image and business strategy

Most likely, Warren Buffet is sincere when he claims that luxury does not seduce him, and does not deceive himself when he says that he lives in his first, rather modest for him house because he likes it there and because it is his house. On the other hand, in all these actions aimed at demonstrating indifference to luxury, there is a hidden meaning. The image of "your boyfriend" works on a business strategy.

This image turned out to be exceptionally good for communication in the highest political circles. For example, Buffett very competently used it, protecting Salomon Bank from liquidation. At the congressional hearing, Buffett was "a kind of timid and modest man with a hat in his hands." Despite his 700 millionth investment in Salomon, congressmen perceived Buffett not as a figure on Wall Street, but as a person from the province, and a good half believed that Omaha was a farming town. A Nebraska spokesman played up, stating that Buffett is a typical guy who “was born and raised in the Midwest,” “continues to live on a quiet green street in Omaha” and “fills in his own tax returns”. Buffett’s bank and investment were saved.

In this regard, I recall the workers of the Soviet nomenclature and some deputies who also tried their best to impress people “from the people”.

It is possible that such popularity gives Buffet additional points when investing: he gets the opportunity to indirectly influence the price of shares of companies whose packages he bought, by advertising their products.
And finally, Buffett’s popularity attracts a lot of people to the Berkshire shareholders' meeting - in 2015, about 44 thousand people arrived. At the meeting, which is called Woodstock for capitalists, Berkshire sells almost all the goods produced by the company and all the services it provides - from Justin Boots cowboy-style boots to GEICO car insurance.

Small pleasures

In 1986, he bought a private plane, which flies on the business of the company.

It is curious that Buffett's passion for flying by private jet is actively used to promote businesses owned by the company he controls. So, in a letter to shareholders, “Berkshire”, Buffett once told me that his family was flying with NetJets, a company owned by Berkshire, which provides private aviation services, and even gave statistics on how many hours he and his wife had flown in a year.

And yes, Buffett has long been buying expensive things. And journalists remember his past indifference to clothes and try to “beat”. Once he was asked why he wears cheap suits. The answer was simply brilliant: “Costumes I buy are expensive. They look cheap on me. ”

Berkshire was a major shareholder of McDonalds and still owns a serious stake in Coca-Cola.

And it is still a big question whether Buffett goes to McDonalds and drinks coke in a private setting. Andrew Kilpatrick, a Berkshire shareholder, describes a lunch with Buffett: “He ordered a bacon sandwich, lettuce and tomatoes, a salad and iced tea. When I started ordering a cola, he exclaimed: “My God!” "Approximately the same thing is said about the dinner with Buffett and the famous economic observer Louis Rucker:" The only thing about which I was told that it is absolutely for sure - that Buffett ... does not drink anything except cherry cola.

Demonstrative consumption of Buffett - hamburgers and Coca-Cola - is demonstrative consumption, on the contrary.