Warren Buffett’s Instructions For Wife’s Inheritance

Warren Buffett is a world-renowned investor. Many would consider him the best alive. He’s among the world’s richest men and he made the majority of his money investing in stocks and buying companies. But someday he’ll pass. And he left instructions to the trust administrator on how to invest the money he’s passing on to his wife.

The interesting thing is with all his investing knowledge, Warren Buffett’s plan for his wife’s inheritance is incredibly simple and straight forward. The trustee is to put the money into two investments at an allocation of 90/10. The investments are an S&P 500 index at 90% and short term government bonds at 10%. That’s it.

My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard’s.) I believe the trust’s long-term results from this policy will be superior to those attained by most investors – whether pension funds, institutions or individuals – who employ high-fee managers”.

Warren Buffett in 2013 Annual Berkshire shareholder letter

You can exactly replicate this easily with Vanguard ETF’s. The ETF’s would be as follows.

A quick mock up of replicating the “Buffett family trust”
VOO- The S&P 500 ETF90%
VGSH- Vanguard Short-Term Treasury10%

Automate the Plan

And if you don’t want to maintain the allocation you don’t need to pay a trustee one percent to do it. There are robo-advisors you can use to maintain it for you.

Some articles need to be short and sweet. That is Buffett’s plan for the wife’s inheritance. It could be a great model to follow if the world’s most successful investor is choosing it for his family.

I should mention that while I’ve been investing for over 25 years, I’m not a licensed broker or investment advisor and investment ideas are for entertainment and informational purposes only. Consult an investment advisor before investing money.

Leave a Reply

Your email address will not be published. Required fields are marked *