Rick Warren's Leverage Loss

A story about Warren Buffett and Charlie Munger's lesser-known third business partner who lost everything by being in too much of a hurry to get rich.

"Nobody knows about the third business partner. They had a third business partner named Rick. He was just as smart as them, but was in a hurry to get rich. Monish asked Warren about what happened to Rick at one of their lunches.

Warren said something along the lines that Charlie and him always knew they would become incredibly wealthy, but they were not in a hurry. Rick was just as smart as them but he was in a hurry. In the seventies, around '73-'74 downturn, Rick had margin loans and was highly leveraged. When the stock market went down 70%, all those margin calls happened and he had to sell his Berkshire shares to Warren. Warren bought them for like $40 apiece. Now those same shares are worth half a million plus."