Finance

Warren Buffett speaks out against creating family wealth dynasties, gives away another $1.1 billion

Published

5 months ago

November 25, 2024

Business Finance News

Warren Buffett

David A. Grogan | CNBC

Warren Buffett, who has amassed a $150 billion personal fortune, made a strong case against creating “dynastic” wealth as he named three independent trustees to oversee his philanthropy following his children and donated another $1.1 billion in Berkshire Hathaway stock to four family foundations.

Instead of leaving his three children an enormous inheritance, the 94-year-old legendary investor has long pledged to give away 99% of the fortune he built at Berkshire, the Omaha, Nebraska-based conglomerate he started running since 1965.

Buffett believes family wealth dynasties could have negative consequences such as eroding personal growth and complicating relationships. Meanwhile, they also create societal uncertainties as it’s unforeseeable how future generations choose to distribute such wealth.

“I’ve never wished to create a dynasty or pursue any plan that extended beyond the children,” Buffett wrote in a lengthy letter Monday. “I know the three well and trust them completely. Future generations are another matter. Who can foresee the priorities, intelligence and fidelity of successive generations to deal with the distribution of extraordinary wealth amid what may be a far different philanthropic landscape?”

Successor trustees named

The “Oracle of Omaha,” who owns about 37.6% of Berkshire Class A shares, said the assets he’s collected may take longer to deploy than his children live. He has appointed three trustees of his charitable trust to potentially succeed his children in disbursing his wealth. Buffett’s children are now 71, 69 and 66.

“Three potential successor trustees have been designated. Each is well known to my children and makes sense to all of us. They are also somewhat younger than my children,” Buffett wrote. “But these successors are on the wait list. I hope Susie, Howie and Peter themselves disburse all of my assets.”

The identity of the trustees was not revealed.

Buffett has been making annual donations to four family foundations since 2006. He said he’s built strong trust in his children’s managerial ability and philanthropic ambition through years of observation.

“The 2006-2024 period gave me the chance to observe each of my children in action and they have learned much about large-scale philanthropy and human behavior,” he said. “They enjoy being comfortable financially, but they are not preoccupied with wealth. Their mother, from whom they learned these values, would be very proud of them. As am I.”

Buffett’s Berkshire, which pierced a $1 trillion market cap this year, owns a vast array of well-established businesses, ranging from its crown jewel Geico insurance to BNSF Railway to consumer brands like Dairy Queen and See’s Candies.

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Finance

More Americans buy groceries with buy now, pay later loans

Published

4 hours ago

April 26, 2025

Business Finance News

People shop for produce at a Walmart in Rosemead, California, on April 11, 2025.

Frederic J. Brown | Afp | Getty Images

A growing number of Americans are using buy now, pay later loans to buy groceries, and more people are paying those bills late, according to new Lending Tree data released Friday.

The figures are the latest indicator that some consumers are cracking under the pressure of an uncertain economy and are having trouble affording essentials such as groceries as they contend with persistent inflation, high interest rates and concerns around tariffs.

In a survey conducted April 2-3 of 2,000 U.S. consumers ages 18 to 79, around half reported having used buy now, pay later services. Of those consumers, 25% of respondents said they were using BNPL loans to buy groceries, up from 14% in 2024 and 21% in 2023, the firm said.

Meanwhile, 41% of respondents said they made a late payment on a BNPL loan in the past year, up from 34% in the year prior, the survey found.

Lending Tree’s chief consumer finance analyst, Matt Schulz, said that of those respondents who said they paid a BNPL bill late, most said it was by no more than a week or so.

“A lot of people are struggling and looking for ways to extend their budget,” Schulz said. “Inflation is still a problem. Interest rates are still really high. There’s a lot of uncertainty around tariffs and other economic issues, and it’s all going to add up to a lot of people looking for ways to extend their budget however they can.”

“For an awful lot of people, that’s going to mean leaning on buy now, pay later loans, for better or for worse,” he said.

He stopped short of calling the results a recession indicator but said conditions are expected to decline further before they get better.

“I do think it’s going to get worse, at least in the short term,” said Schulz. “I don’t know that there’s a whole lot of reason to expect these numbers to get better in the near term.”

The loans, which allow consumers to split up purchases into several smaller payments, are a popular alternative to credit cards because they often don’t charge interest. But consumers can see high fees if they pay late, and they can run into problems if they stack up multiple loans. In Lending Tree’s survey, 60% of BNPL users said they’ve had multiple loans at once, with nearly a fourth saying they have held three or more at once.

“It’s just really important for people to be cautious when they use these things, because even though they can be a really good interest-free tool to help you kind of make it from one paycheck to the next, there’s also a lot of risk in mismanaging it,” said Schulz. “So people should tread lightly.”

Lending Tree’s findings come after Billboard revealed that about 60% of general admission Coachella attendees funded their concert tickets with buy now, pay later loans, sparking a debate on the state of the economy and how consumers are using debt to keep up their lifestyles. A recent announcement from DoorDash that it would begin accepting BNPL financing from Klarna for food deliveries led to widespread mockery and jokes that Americans were struggling so much that they were now being forced to finance cheeseburgers and burritos.

Over the last few years, consumers have held up relatively well, even in the face of persistent inflation and high interest rates, because the job market was strong and wage growth had kept up with inflation — at least for some workers.

Earlier this year, however, large companies including Walmart and Delta Airlines began warning that the dynamic had begun to shift and they were seeing cracks in demand, which was leading to worse-than-expected sales forecasts.