Warren Buffett’s best investments weren’t stocks: He says these personal choices gave him the greatest returns

Warren Buffett is stepping down as chairman of Berkshire Hathaway after serving in the role at the $1 trillion conglomerate for more than 50 years. Buffett, known by a legion of financial market followers as the Oracle of Omaha, has spent decades building a reputation as one of the world's most successful investors. He has bought stakes in some of the biggest companies and built Berkshire Hathaway into a global investment powerhouse.

But when Buffett was asked about the best investments he had ever made, his answer was not a stock, a company or a multibillion-dollar acquisition. Instead, he pointed to something far more personal — his marriages, his home and a book that changed the way he thought about investing.

For Buffett, the idea of an investment has always extended beyond simply putting money into an asset and waiting for it to appreciate.

Marriage licenses

Buffett has said that his two marriage licenses were among the best investments of his life. He married Susan Thompson in 1952. After her death in 2004, Buffett married Astrid Menks in 2006.

His $31,500 house

Buffett also considers his Omaha home one of his best investments. He bought the five-bedroom, 6,570-square-foot stucco house in Nebraska in 1958 for $31,500. More than six decades later, Buffett continued to live in the same property.

In Berkshire Hathaway's 2010 annual letter, Buffett described the house as the third-best investment he had ever made, after his two wedding rings.

The house became another example of Buffett's preference for avoiding unnecessary extravagance, even after becoming one of the world's wealthiest people. He has repeatedly argued that buying a home can make sense when the purchase is affordable and the buyer intends to stay for a long time.

The book that changed Buffett’s investing philosophy

Then there is the investment that had perhaps the biggest influence on Buffett's professional life: Benjamin Graham's The Intelligent Investor. In his 2013 annual letter to Berkshire Hathaway shareholders, Buffett compared the value he received from Benjamin Graham's book The Intelligent Investor with what he had paid for it.

“I can’t remember what I paid for that first copy of The Intelligent Investor,” Buffett wrote. “Whatever the cost, it would underscore the truth of Ben’s adage: Price is what you pay, value is what you get.”

He added that buying Graham's book was the best investment he had made, except for his purchase of two marriage licenses.

The comment offered a glimpse into how Buffett viewed value: the price of something and the value it ultimately provides can be very different things.

Graham was Buffett's professor at Columbia Business School and became one of the most important influences on his approach to investing.

Graham is widely regarded as a pioneer of value investing. His philosophy centered on determining what a business is fundamentally worth and looking for opportunities where the market price was below that intrinsic value.

Buffett embraced many of those principles, although his investment philosophy evolved considerably over time.

Looking back at his copy of The Intelligent Investor, Buffett said its cost was almost irrelevant compared with what the book ultimately gave him.

That is why his famous line from Graham — “Price is what you pay, value is what you get” — carries particular significance in Buffett's own story.

Buffett’s investment advice is surprisingly simple

Buffett has also repeatedly emphasized the importance of learning.

During a 2000 talk at Columbia Business School, he told MBA students that reading extensively could dramatically improve their knowledge.

“Read 500 pages like this every day,” he said. “All of you can do it, but I guarantee not very many of you will do it.”

The advice reflects something Buffett has practiced throughout his career. He has long described reading as a major part of his daily routine and has said that he spends much of his time reading and thinking.

For an investor whose name is synonymous with financial markets, his message has often been surprisingly straightforward: build knowledge, understand value and think for the long term.

Even Buffett’s breakfast has an investing lesson

Buffett's famously frugal lifestyle has produced plenty of anecdotes over the years. One of the most famous involves his regular breakfast stop at McDonald's on the way to work.

In the HBO documentary Becoming Warren Buffett, he explained that his wife, Astrid, would put money in the car's cup holder for his breakfast. He would then decide what to order depending on how much money was available.

If he was feeling less prosperous, he might choose the cheaper option.

“If the market’s down this morning, I’ll pass on the $3.17 and go with the $2.95,” Buffett said.

The specific breakfast prices have long since become dated, but the anecdote captures the broader image Buffett has cultivated: even after becoming extraordinarily wealthy, he has remained unusually conscious of value and spending.