Hello! So, you're looking to understand how to make money with Berkshire Hathaway. That's a fantastic goal, as it means you're interested in investing alongside one of the most successful and legendary investors of all time, Warren Buffett, and his handpicked team. This isn't about getting rich overnight; it's about a patient, long-term approach to building wealth.
Are you ready to embark on this journey and learn how you can become a part of the "Oracle of Omaha's" empire? Let's dive in!
Step 1: Understand What Berkshire Hathaway Really Is
Before you even think about buying a single share, it's crucial to understand what you're investing in. Berkshire Hathaway is not your average company. It's a massive conglomerate with a diverse and eclectic collection of businesses and a huge portfolio of publicly traded stocks.
Think of it this way: When you buy a share of Berkshire Hathaway, you're not just buying a piece of a single company that makes one product. You're essentially buying a slice of a powerful, diversified mutual fund managed by a team that has a proven track record of finding and nurturing high-quality businesses.
Owned Businesses: Berkshire owns over 60 businesses outright, ranging from insurance giants like GEICO and railroad companies like BNSF to consumer brands like See's Candies and Fruit of the Loom.
Stock Portfolio: In addition to its wholly-owned businesses, Berkshire Hathaway holds a massive portfolio of common stocks, including significant stakes in companies like Apple, Coca-Cola, American Express, and Bank of America. This portfolio is carefully curated, and Buffett and his team constantly adjust it based on their long-term value investing philosophy.
This two-pronged approach is what makes Berkshire so unique. The operating businesses generate a huge amount of cash, much of which is then reinvested by Buffett's team to acquire more businesses or add to the public stock portfolio. This creates a powerful compounding effect over time, which has been a major driver of Berkshire's phenomenal success.
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| How To Make Money With Berkshire Hathaway |
Step 2: Choose the Right Class of Shares
This is a critical step, as Berkshire Hathaway has two classes of stock, and they are vastly different in price.
Class A (BRK.A): These are the original shares. They are famously expensive, with a single share costing hundreds of thousands of dollars. As of June 2025, one BRK.A share is around $730,000. They have significantly more voting rights than the B shares. For most individual investors, these are simply out of reach.
Class B (BRK.B): Introduced in 1996, these shares were created to make investing in Berkshire Hathaway accessible to a wider range of investors. A Class B share represents 1/1500th of a Class A share, making them much more affordable. They also have 1/10,000th of the voting rights of a Class A share. As of June 2025, a single BRK.B share is around $485.
For the vast majority of investors, BRK.B is the way to go. You get the same exposure to the underlying businesses and stock portfolio, and you can buy them at a price that fits your budget. Some brokerage firms even allow you to buy fractional shares of BRK.B, so you can start investing with as little as a few dollars.
Step 3: Open a Brokerage Account
You can't buy Berkshire Hathaway stock directly from the company. You need a brokerage account to buy and sell stocks.
Choose a Brokerage Firm: There are many online brokerage firms to choose from, such as Zerodha, Groww, ICICI Direct (in India), or Charles Schwab, Fidelity, and E*TRADE (in the US). Look for a broker with low or no trading fees and a user-friendly platform.
Open and Fund Your Account: Follow the brokerage's instructions to open an account. You will need to provide personal information and proof of identity. Once your account is open, you will need to fund it with money, either by linking your bank account or through a wire transfer.
Complete Necessary Forms: If you are investing from India in US stocks like BRK.B, you may need to complete a W-8BEN form for tax purposes. This form helps the US government determine the correct tax withholding rate for non-US investors. Your brokerage will guide you through this process.
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Step 4: Research and Place Your Order
Now for the exciting part! But don't just jump in. A key part of Buffett's philosophy is doing your homework.
Research the Fundamentals: While you're buying into a conglomerate, it's still a good idea to look at Berkshire's financial health. You can find their annual and quarterly reports on the company's investor relations website. You don't need to be a financial wizard, but having a basic understanding of their revenue, earnings, and cash position is beneficial.
Decide How Much to Invest: Don't put all your eggs in one basket. A general rule of thumb is to have no more than 5-10% of your overall investment portfolio in individual stocks, with the rest allocated to diversified funds.
Place Your Order:
Log in to your brokerage account.
Search for BRK.B (or BRK.A if you're feeling adventurous and have a spare million dollars!).
Enter the number of shares you want to buy or the dollar amount you want to invest (if your broker offers fractional shares).
Choose your order type. A market order will buy the shares at the current market price, while a limit order allows you to set a maximum price you are willing to pay. For long-term investors, a market order is often sufficient as small price fluctuations don't matter over decades.
Submit the purchase order.
Step 5: Embrace the "Forever" Holding Period
This is arguably the most important step in making money with Berkshire Hathaway. Warren Buffett's philosophy is built on the concept of long-term compounding. He famously says, "Our favorite holding period is forever."
Avoid Short-Term Speculation: Don't check the stock price every day. Don't panic and sell when the market is down. Market volatility is a normal part of investing. Buffett and his team use these downturns as opportunities to buy more shares at a discount.
Benefit from Compounding: By holding the stock for years, you allow the value of Berkshire's underlying businesses and stock portfolio to grow and reinvest their earnings. This compounding effect, where your returns generate their own returns, is how true wealth is built.
No Dividends: It's important to note that Berkshire Hathaway does not pay a dividend. Buffett believes he can generate more value for shareholders by retaining the earnings and reinvesting them in the business, rather than paying them out as dividends. This is a key part of their growth strategy.
Step 6: Stay Informed and Patient
QuickTip: Repetition reinforces learning.
While you shouldn't obsess over daily price movements, it's a good idea to stay informed about the company.
Read the Annual Letter: Warren Buffett's annual letter to shareholders is a must-read for any investor. It provides deep insights into the company's performance, his investment philosophy, and his thoughts on the economy.
Watch the Annual Meeting: The Berkshire Hathaway annual meeting in Omaha, Nebraska, is known as "Woodstock for Capitalists." While you may not be able to attend in person, it is often live-streamed, giving you a chance to hear directly from Buffett and his team.
Remember: The success of Berkshire Hathaway is built on a foundation of patience, discipline, and a long-term perspective. You are not just buying a stock; you are becoming a partner in a well-managed empire built on a timeless investment philosophy.
FAQs: How to Make Money with Berkshire Hathaway
Here are 10 related FAQ questions with quick answers:
How to start investing in Berkshire Hathaway? You can start by opening a brokerage account with a platform that allows you to buy US stocks and then purchasing Class B shares (BRK.B) which are much more affordable than the Class A shares.
How to buy Berkshire Hathaway Class B shares? Open a brokerage account, fund it, search for the ticker symbol BRK.B, and place a buy order for the desired number of shares or a specific dollar amount.
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How to invest in Berkshire Hathaway without buying individual shares? You can indirectly invest in Berkshire Hathaway by buying into a low-cost index fund or an exchange-traded fund (ETF) that tracks a broad market index like the S&P 500, as Berkshire Hathaway is a significant holding in these indexes.
How to make money from Berkshire Hathaway's dividends? Berkshire Hathaway does not pay dividends. Instead, the company retains all its earnings and reinvests them back into its businesses and stock portfolio to create more value for shareholders over the long term.
How to know when to buy Berkshire Hathaway stock? Warren Buffett's philosophy suggests that a great business at a fair price is a better investment than a fair business at a wonderful price. The best time to buy is often when you have the capital and a long-term investment horizon, rather than trying to time the market.
How to convert Berkshire Hathaway Class A shares to Class B? Class A shares can be converted into 1,500 Class B shares at any time. However, you cannot convert Class B shares into Class A shares.
How to calculate the value of Berkshire Hathaway stock? While complex valuations exist, Buffett focuses on a company's "intrinsic value" – its ability to generate cash flow in the future. For investors, the simplest approach is to track the company's earnings, book value, and the performance of its diverse set of businesses.
How to benefit from Berkshire Hathaway's investment strategy? By buying and holding the stock for the long term, you are essentially adopting Warren Buffett's value investing principles and allowing the power of compounding to work in your favor.
How to attend the Berkshire Hathaway annual meeting? If you own even a single share of BRK.A or BRK.B, you are entitled to attend the annual meeting in Omaha, Nebraska. It is also often live-streamed for investors who cannot attend in person.
How to handle stock market volatility when owning Berkshire Hathaway? Embrace the volatility. Volatility is normal and can present opportunities to buy more shares at a lower price. Remember Buffett's advice: "Be fearful when others are greedy, and greedy when others are fearful."
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