Charlie Munger Helped A Former Classmate Become A Billionaire By Introducing Him To Warren Buffett — His Investment Increased 199,900%

The late Charlie Munger, renowned for his partnership with Warren Buffett, played a significant role in the financial success of lesser-known billionaire Franklin Otis Booth Jr. 

Booth, a great-grandson of the Times Mirror Co. founder Gen. Harrison Gray Otis, maintained a low-profile lifestyle despite his wealth. His journey to becoming a billionaire was highlighted in a 1998 Forbes article titled “The Accidental Billionaire,” which portrayed Booth as an understated yet savvy investor, heavily influenced by Munger.

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Booth and Munger were classmates but didn't know each other. They met when Booth's father set him up with a law firm to investigate a business deal. Munger was a young lawyer at the time working for the firm. 

Although the deal fell through, the encounter laid the foundation for a lasting friendship and future collaborations. Munger’s advice led Booth to invest in real estate, specifically in developing condominiums on his grandfather's Pasadena, California, property. This initial venture was a financial success, doubling their investment within two years.

The turning point in Booth's financial trajectory came when Munger introduced him to Buffett. Impressed by Buffett’s investment strategies, Booth invested $1 million in Berkshire Hathaway Inc. in the early 1960s. Over the decades, this investment ballooned into a billion-dollar fortune, solidified by Booth’s conservative approach to wealth management and aligning closely with Buffett’s principles of long-term value investing. 

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Despite his wealth, Booth’s lifestyle remained grounded. He lived in the same four-bedroom house for 30 years to avoid high property taxes and shunned ostentatious displays of wealth. His investments were diverse, ranging from Berkshire Hathaway stock to substantial agricultural holdings and other funds.

When he died in 2008, Forbes reported his net worth was $2.7 billion, with $2 billion of that Berkshire Hathaway stock. This means his $1 million investment increased by 199,900%. Booth's share of Berkshire Hathaway was 1.4%, just under Munger's 1.5%. 

Booth’s philosophy on wealth was clear — he intended to leave the majority of his estate to his children, unlike Buffett’s well-publicized plan to donate the bulk of his fortune. This decision reflected Booth’s values and his approach to family and legacy.

His financial achievements, while remarkable, were matched by his commitment to a principled life, guided by the wisdom of longtime friends like Munger and the sage advice he shared.

While not everyone can meet Buffett or have a mentor like Munger, the investment principles they champion can still be applied by anyone looking to grow their wealth. 

Consulting with a financial adviser is one practical step that people can take to understand and implement these strategies, such as long-term value investing and a disciplined approach to financial management. These principles, centered on thorough research and patience, can help people build and sustain wealth over time, regardless of market fluctuations.

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