The $100,000 Bet: How a Nebraska Widow’s Trust in Warren Buffett Built a Philanthropic Legacy

A Fateful Meeting in Omaha (1956)

In the summer of 1956, Anne Gottschaldt, a 60-year-old widow living in Omaha, Nebraska, received an unexpected phone call from her stockbroker—none other than Benjamin Graham, the father of value investing and Warren Buffett’s mentor.

Graham told her, "There’s a young man in Omaha you should meet. He’s starting an investment partnership, and I’ve never seen anyone like him."

Curious, Anne invited the 25-year-old Buffett to her home. Over coffee, he explained his investment philosophy in simple terms—buying undervalued stocks with a margin of safety. Years later, Anne would joke, "I barely understood half of what he said, but I believed in him."

The $100,000 Gamble

At a time when most women—especially widows—were discouraged from managing their own finances, Anne made a bold decision. She handed Buffett $100,000 (equivalent to over $1 million today), nearly her entire life savings.

What convinced her?

• Buffett’s transparency—he refused to disclose specific holdings, saying, "Either you trust me to manage it, or you don’t."

• His unique fee structure—he took no fees unless returns exceeded 6% annually, then kept only 25% of profits above that.

• His integrity—he promised to treat her money as his own.

The Partnership That Changed Everything

Buffett’s partnership delivered 29.5% annual returns over the next 13 years, crushing the Dow’s 7.4%. By 1969, when Buffett closed the fund:

• Anne’s $100,000 had ballooned to $6-8 million (≈$50 million today).

• She reinvested most of it into Berkshire Hathaway stock, which grew exponentially over the next five decades.

The Quiet Philanthropist

Unlike flashy tycoons, Anne and her family never sought attention. Instead, they used their wealth to:

1. Establish the Gottschaldt Foundation, which still supports Nebraska education and healthcare today.

2. Fund local scholarships, ensuring underprivileged students could attend college.

3. Donate anonymously to Omaha hospitals and community programs.

Buffett’s Tribute to His Earliest Backer

Decades later, Buffett would credit Anne as one of the key reasons for his success. In a rare interview, he said:
"Mrs. Gottschaldt took a chance on me when I had no track record. Without investors like her, Berkshire wouldn’t exist. She proved that trust compounds faster than money."

Her story also influenced his Giving Pledge, where billionaires commit to donating most of their wealth. Buffett often cites Anne as proof that "wealth isn’t about luxury—it’s about legacy."

The Ripple Effect of a Single Decision

Anne’s $100,000 investment didn’t just make her family wealthy—it funded decades of philanthropy:

• Her foundation has granted millions to Nebraska causes.

• Her trust in Buffett helped fuel his $50+ billion in donations to the Gates Foundation.

• Her story inspires ordinary investors to think long-term.

The Forgotten Hero of Berkshire’s Origin Story

Today, Anne’s name isn’t in financial textbooks. But in Omaha, her legacy lives on:

• The house where she first met Buffett is now owned by another financial titan.

• Local students still receive scholarships in her family’s name.

• Buffett himself keeps a photo of his early investors—with Anne at the center.

Lesson for Every Investor

Anne Gottschaldt’s story isn’t about stock picks—it’s about recognizing character and patience. As Buffett says:
"The best investments aren’t in stocks—they’re in people you believe in."