The Humble With A Bundle

Modesty, Middle-class Values Define This Millionaires Club

November 08, 1998|By Stevenson Swanson, Tribune Staff Writer.

OMAHA — Richard and Marilyn Holland have donated millions of dollars to charity and have millions more to give, but they still live in the ranch house they built in 1957, when he was starting out in the advertising business.

Dan Monen wrote out a check for $500,000 to Creighton University last year, but home for him is a studio apartment in a retirement complex.

Robert Soener used a chunk of his fortune to set up a $2 million charitable foundation, but he also does the cooking and the cleaning at the sturdy brick house he shares with his youngest son.

Welcome to the world of Omaha's plain-folks tycoons.

These multimillionaires defy the image of the high-living, high-profile moneyed set. They live not in mansions but in the well-kept middle-class homes where they raised their families. They drive sensible cars and they wear sensible clothes. Think cardigan sweaters instead of Armani suits.

"I live a comfortable life," said Leland Olson, a retired obstetrician who has donated more than $5 million to the University of Nebraska Medical Center. Olson still lives in the classic ranch house that he and his wife, Dorothy, built in the 1950s. "We see no need to expand and be more grandiose," Olson said. "I'm something of a tightwad, too."

These gold-plated grandparents are reaping the almost unbelievably lucrative rewards of a decision they made four decades ago. Back in the late 1950s and early 1960s, they entrusted some of their savings to a young graduate of the Columbia University Business School who was setting up investment partnerships so he could put his ideas about the stock market into practice. His name was Warren Buffett.

Today, Buffett's shares in Berkshire Hathaway, the former textile company he built into a diversified conglomerate, are worth an estimated $29 billion. And his fellow shareholders haven't done too badly either.

George Morgan, a broker at the Omaha firm Kirkpatrick Pettis who specializes in handling the assets of the wealthy, estimates that some 30 families in the Omaha area are worth more than $100 million, thanks to their Berkshire Hathaway holdings. In a city with a population of 345,000, there may be as many as 15,000 millionaires, he adds, many of whom achieved that seven-figure status because of Buffett's investing genius.

"(Buffett) was the first person who ever made sense to me about investing with his theory of the undervalued asset," said Holland, referring to the approach that Buffett learned from his investment mentor, Columbia University's Benjamin Graham. "Eventually, the value of the asset would be realized. You could go home and sleep at night not worrying about going bankrupt by speculating. It was a very solid approach."

Make that a solid gold approach. Morgan calculates that, if left untouched over the decades, a $10,000 investment in one of Buffett's original partnerships back in the late 1950s is now worth roughly $250 million in Berkshire stock.

Buffett, who declined to be interviewed, issued Berkshire stock to the members of his investment partnerships when he closed them in the late 1960s and turned his attention to running his holding company. Some investors sold the stock, which had an original market value of $43 a share. Others held on and watched the stock shoot up in price, to as much as $84,000 a share in July.

"I never sold it because I never had to," said Monen, 71, an attorney who recalls digging up dandelions with Buffett when they were boys. "I retired when I was 55 and I couldn't have done that except for what Buffett did. Otherwise, I would perhaps still be working."

Back in the 1950s, plenty of people passed up the chance to invest in one of Buffett's partnerships. He was, after all, hardly the model of a buttoned-down, flannel-suited broker. His original office was a single room in his house, and he preferred old sneakers to wingtips. His folksy personality, ordinary tastes and little affectations, such as pronouncing Soener's first name "Ro-bair," did not exactly inspire confidence.

"The idea that a 27- or 28-year-old man was going to be the investment genius of the century, well, a lot of people in this burg pooh-poohed that," said Holland, 77, who met Buffett through Monen and was immediately impressed by him. "I've never run into anybody quite like Warren. He not only has a brilliant mind, discipline and integrity. He's also a very witty, enjoyable person to have a conversation with about almost any topic."

Buffett recruited his initial investors from his family circle, his friends and Omaha's professional class, the sorts of people who had the $5,000 to $10,000 ante Buffett required. But good timing often played a part. Soener, for instance, had just received a $10,000 bonus check from the brokerage firm where he worked when Buffett happened by his office. What are you going to do with it? the future billionaire asked.