Warren Buffett’s deputy turned $70,000 into $264 million in 29 Years: How Ted Weschler did it

Ted Weschler, one of Warren Buffett’s deputies at Berkshire Hathaway, grew his retirement account from more than $70,000 at the end of 1989 to $264 million at the end of 2018. He attributed the account’s success to careful stock selection, exceptional luck and a multi-decade investment period, according to a report.

Weschler opened his individual retirement account (IRA) in 1984. He was 22 years old at that time and earning $22,000 a year as a junior financial analyst. He said maximizing his contributions, taking advantage of a generous employer match and buying assets that increased in value helped him accumulate more than $70,000 in the account by the end of 1989.

In 1989, Weschler left his job to start a private equity firm and transferred his retirement savings into a self-directed IRA, giving himself full control over his investments.

How Ted Weschler Grew His Retirement Account to $264 Million

Over the following 29 years, Weschler invested the account only in publicly traded securities that any American could buy, he told ProPublica.

He said the account’s growth resulted from careful stock selection, exceptional luck and the time his investments had to grow. The final amount, he added, was beyond anything he had expected.

Weschler also said the result was available to taxpayers with an appropriately long investment horizon and was not the product of exclusionary tax strategies.

His experience differed from that of PayPal cofounder Peter Thiel. ProPublica reported that Thiel used a Roth IRA to buy shares in PayPal, Palantir and Facebook while the companies were still private. According to the report, a $1,700 contribution Thiel made in 1999 grew into $5 billion in tax-free assets by 2019.

Weschler Converted His IRA to a Roth IRA in 2012

Weschler converted his IRA into a Roth IRA in 2012, when the account contained $131 million. He told ProPublica that he paid more than $28 million in federal taxes to complete the conversion.

The account was worth $264 million at the end of 2018, according to the report.

The Business Insider article stated that annual Roth IRA contributions were capped at $6,000 at the time. It also reported that account holders could withdraw the contents tax-free once they were six months shy of their 60th birthday. Weschler was due to reach that age in November 2021.

Weschler acknowledged that he was an “enormous beneficiary” of the IRA. He also said he supported adjusting the tax benefits available to retirement accounts above a certain size.

He explained the account’s growth by pointing to the time available for investments to compound. In his view, each dollar saved as a 22-year-old in New York City had grown over the ensuing 35 years to more than $9,000.

How Weschler Joined Warren Buffett at Berkshire Hathaway

Weschler joined Berkshire Hathaway in 2012 after spending more than $5 million to have lunch with Buffett in 2010 and 2011. He helps Buffett manage Berkshire Hathaway’s stock portfolio, which the report valued at $270 billion.

Weschler continued to make investments with his own money. The Business Insider report noted that he had disclosed a 6% stake in department-store chain Dillard’s the previous October. The company’s stock price had more than quadrupled since then, bringing the value of his investment to about $200 million.

The report also said Buffett had $20 million in a Roth IRA.