Warren Buffett once said that 2 investments would ‘increase’ his family’s wealth. How to follow

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Warren Buffett is known for his shrewd investments, especially his ability to buy companies with long-lasting competitive advantages. However, his investment wisdom extends beyond companies and stocks.

In fact, there are non-stock investments made by the current CEO of Berkshire Hathaway that he considers particularly “informative.”

“These two investments will be solid and satisfying assets for the rest of my life and, later, for my children and grandchildren,” he wrote in a letter to Berkshire shareholders (1).

He also pointed out that the income from these two funds “will probably grow in the coming decades.”

Here’s a closer look at those two investments — and how you can get in on the action today.

Buffett’s first investments in this asset class began in the ’80s, when farm prices in the Midwest fell sharply due to the market bubble. As prices fell, Oracle saw an opportunity to invest.

“In 1986, I bought a 400-acre farm, 50 miles north of Omaha, from the FDIC. It cost me $280,000, much less than what the bank had defaulted on the farm a few years earlier,” Buffett recounted in his book.

Buffett then calculated that the average return from the farm would be 10%. He also believed that production would improve over time and that crop prices would rise. He stressed that “both expectations were realized,” noting that in 2014, the farm had tripled its income and was worth five times what it paid.

Farmland has historically demonstrated its ability to appreciate in value over time, especially during times of inflation. This feature makes farmland an attractive asset for many investors, not just Buffett. Among them are fellow billionaires like Bill Gates.

In fact, Gates owns 242,000 acres of farmland in the US, making him the largest private rancher in the country, according to the Land Report (2). His property spans more than 17 states, with significant holdings in Louisiana, Arkansas and Nebraska.

If such foreign investment seems like a mismatch to Microsoft’s founder, keep the dollar signs in mind. Gates’ investment firm views farmland as a “stable, long-term asset that diversifies his technology-heavy portfolio.”

However, farm ownership comes with significant obstacles. Capital to buy even small plots of land poses a huge barrier to entry for everyday investors. In addition, investors must understand farming or rely on experienced farm management.

The USDA and other organizations offer programs for individuals to purchase farms, but primarily, this category of property is reserved for accredited investors.

Enter FarmTogether, a company that offers a range of financing and bespoke investment opportunities for investors looking to put some money to work on virtual farms. Their rigorous process, backed by advanced technology and industry experts, ensures only the top 1% of farm deals make it to investors.

With more than 2.1 billion dollars invested in accordance with a consistent and systematic investment philosophy, FarmTogether makes it possible for accredited investors to take advantage of this investment category, such as Buffett and Gates.

Read More: I’m in my late 50s and have no retirement savings. Is it too late?

A second investment also came from the bursting of the bubble – this time in real estate.

In 1993, Buffett learned that the New York retail property near New York University was to be sold by the Resolution Trust Corporation (RTC).

Buffett determined that the current unattainable yield from the area was about 10%. He noted that the RTC was not managing the building well, and leasing the idle shops would improve its income.

More importantly, Buffett identified a huge opportunity: The largest tenant, occupying about 20% of the space, was paying rent of only $5 per square foot, while other tenants averaged $70. He wrote, “The expiration of this lease in nine years will certainly provide a significant boost to revenue.”

Armed with this analysis, Buffett joined a small group of investors to buy the property. The decision was successful.

“Annual dividends are now more than 35% of our original investment,” Buffett wrote in his letter to shareholders.

While Buffett’s listed investments in New York real estate have had impressive returns, similar opportunities have historically been less accessible to the average investor — until now.

While accessing real estate is Buffett’s recommendation, it’s easier said than done. For a more affordable entry point into low-cost real estate, you can instead invest in mogul rental properties.

This real estate investment platform offers limited ownership in blue-chip rental properties, offering investors monthly rental income, real-time appraisals and tax benefits – without the need for large down payments or late-night tenant calls.

Founded by former Goldman Sachs investors, the mogul’s team selects the top 1% of single-family rental properties nationwide. Simply put, you can invest in institutional quality offerings at a fraction of the usual cost.

Each building goes through an inspection process, which requires at least a 12% return even in bad conditions. Across the board, the platform features an average annual IRR of 18.8%. Their cash yield, on the other hand, is between 10% to 12% per year. Offerings typically sell out in less than three hours, with investments typically ranging between $15,000 and $40,000 per property.

All invested money is protected by real assets, it does not depend on the performance of the platform. Each property is held in a private Propco LLC, so investors own the property – not the field. Blockchain-based fractionalization adds a layer of security, ensuring a permanent, verifiable record of each stake.

Getting started is a quick and easy process. You can register for an account and browse available properties. Once you confirm your experience with their team, you can invest like a mogul with just a few clicks.

But real estate is only one piece of this unique asset class. Other options – besides commercial – include multi-family units and industrial real estate.

If diversification into multifamily and industrial rental properties appeals to you, consider investing with Lightstone DIRECT, a new investment platform from Lightstone Group, one of the largest private real estate companies in the country with more than 25,000 multifamily units in its portfolio.

By eliminating intermediaries – brokers and wholesalers – accredited investors with a minimum investment of $100,000 can gain direct access to institutional-quality multifamily opportunities. This simplified model can help reduce fees while improving visibility and control.

And with Lightstone DIRECT, you invest in multiple deals of the same estate alongside Lightstone – a real partner – as Lightstone puts at least 20% of its capital on all donations. All Lightstone investment opportunities are rigorously reviewed, with multiple stages prior to approval by Lightstone Principals, including founder David Lichtenstein.

The way it works is simple: Just register with your email, and you can schedule a call with an investment expert to explore your investment opportunities. From here, all you have to do is verify your information to start investing.

Founded in 1986, Lightstone has a proven track record of delivering strong risk-adjusted returns across market cycles with a historical IRR of 27.6% and 2.54x historical net equity multiple on investments made since 2004. All told, Lightstone has $12 billion in assets under management — including industrial and commercial real estate.

So, even if multi-family rentals don’t appeal to you, Lightstone can still serve you as an investment vehicle in other specific areas.

Get started today with Lightstone DIRECT and invest alongside experienced professionals with skin in the game.

Ultimately, it’s worth asking what you can learn from Buffett’s investments in these two assets.

Perhaps the most important lesson may be the timing of his purchase: Note that although Buffett is optimistic about the future of these two investments, he did so after their respective bubbles had already burst. He waited until the price was right.

He also does his homework. Before investing, he did a thorough analysis to predict his returns, so he had a very good idea of ​​what he was getting into.

In fact, in his letter to shareholders, Buffett emphasized that if you don’t feel comfortable making a rough estimate of a stock’s future earnings, you should “just forget it and move on.”

This good advice can be applied to any investment.

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Berkshire Hathaway (1); World Report (2)

This article provides information only and should not be construed as advice. Offered without warranty of any kind.