Warren Buffett Says His $31,500 Home Was the 'Third Best Investment I Ever Made'— But Only for the Memories, Not the Money. 'I'd Have Made More Renting'

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Warren Buffett didn’t buy his home expecting it to beat the stock market. He bought it to raise a family.

Back in 1958, the Oracle of Omaha dropped $31,500 on a five-bedroom house in a quiet Omaha neighborhood. In today’s world of megamansions and celebrity compounds, that number feels laughably quaint. But to Buffett, the value wasn’t in the square footage — it was in the memories.

In his 2010 annual letter to Berkshire Hathaway shareholders, Buffett wrote: “All things considered, the third best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks. (The two best investments were wedding rings.)”

Only Buffett could say a $1.4 million property was a financial underperformer — and be right.

Even adjusted for inflation, the appreciation on that home looks modest compared to the exponential rise of Berkshire stock over the same stretch. The house is now worth somewhere between $1.2 million and $1.5 million, depending on the estimate. Not bad — just not Buffett-level.

But that’s the point.

“For the $31,500 I paid for our house,” Buffett wrote, “my family and I gained 52 years of terrific memories with more to come.” It wasn’t just a financial move. It was a life move. And that distinction, in Buffett’s world, matters.

This wasn’t a subtle flex — it was a lesson in opportunity cost. The 2010 letter was written in the shadow of the 2008 housing crisis, when millions of Americans were reevaluating what homeownership meant. Buffett, ever the teacher, reminded shareholders that a house isn’t an automatic wealth-builder — it’s only an investment if you treat it like one.

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Over the years, he’s reiterated that homes can be a great source of personal value — just not necessarily the best place to park your cash if you’re chasing high returns.

Still, there’s something quietly powerful about the world’s most famous investor choosing not to upgrade. No Malibu beach house. No Aspen ski lodge. Just the same home on Farnam Street, lived in for nearly seven decades.

Buffett’s example lands with even more weight today as buyers stretch their budgets to chase “starter homes” priced like mini-mansions. The median home now costs around $410,000, mortgage rates remain historically high, and many households are banking on appreciation that might not arrive.

The takeaway isn’t “don’t buy a house.” It’s this: if you’re buying one, make sure it’s for reasons that go beyond resale value. Buffett could have made more money renting. But you can’t cash out 52 years of birthdays, holidays, and memories.

And that, as he might say, is a different kind of compounding.

Most people don’t have to choose between a house or stocks anymore. Thanks to platforms like Arrived, everyday investors can put money into fractional shares of rental homes for as little as $100. You don’t need to fork over a down payment or deal with a leaky roof to start building real estate wealth.

Arrived, which is backed by Jeff Bezos, lets investors buy shares of income-generating homes across the country — collecting rental income and benefiting from long-term appreciation, without ever having to paint a fence or answer a 2 a.m. plumbing call.

Even now, Buffett remains in that same Omaha home — the one where he raised three children, shared a life with two beloved partners, and watched decades of birthdays, holidays, and snowstorms pass through. It never made him a billionaire. But it never had to. In a life defined by compound returns, it’s the one investment that paid dividends in something richer than money: time, love, and staying exactly where he felt most at home.

Real estate is a great way to diversify your portfolio and earn high returns, but it can also be a big hassle. Luckily, there are other ways to tap into the power of real estate without owning property. Arrived Home’s Private Credit Fund’s has historically paid an annualized dividend yield of 8.1%*, which provides access to a pool of short-term loans backed by residential real estate. The best part? Unlike other private credit funds, this one has a minimum investment of only $100.

This article Warren Buffett Says His $31,500 Home Was the 'Third Best Investment I Ever Made'— But Only for the Memories, Not the Money. 'I'd Have Made More Renting' originally appeared on Benzinga.com