Why Warren Buffett replaced $10,000 cash gifts with stocks for his family at Christmas

"I thought: 'Well, [the stock] is worth more than $10,000.' So I kept it, and it kept going up," recalls Mary Buffett

Warren Buffett, renowned for his financial acumen and frugal lifestyle, once had a tradition of gifting his family $10,000 in cash during the holidays. 

However, the billionaire's former daughter-in-law, Mary Buffett, revealed that this tradition changed after he discovered how quickly the cash was being spent.

Mary, who was married to Buffett’s son Peter during the 1980s, shared in a 2019 interview with ThinkAdvisor that Buffett began gifting stocks instead of cash, starting with shares in Coca-Cola.

“Then, one Christmas, there was an envelope with a letter from him. Instead of cash, he’d given us $10,000 worth of shares in a company he’d recently bought, a trust Coca-Cola had,” 

Mary recounted. She added that Buffett gave recipients the choice to either cash in the shares or hold onto them. “I thought: 'Well, [the stock] is worth more than $10,000.' So I kept it, and it kept going up.”

This change in gifting not only showcased Buffett’s philosophy of long-term investment but also exemplified his frugality and desire to pass on financial wisdom. 

From that year forward, stocks replaced cash, with recipients often benefiting from their growing value over time.

Mary, now an author and finance expert, explained that she continued investing in stocks from companies Buffett endorsed, knowing his selections typically resulted in gains. 

Shares often surge after Buffett’s Berkshire Hathaway discloses purchases, signaling investor confidence in his decisions.

When it came to gifting Buffett himself, Mary noted his indifference to material possessions due to his immense wealth. Instead, she and Peter presented him with a balance sheet of their music company to demonstrate its profitability.

At 94, Buffett remains committed to his philanthropic goals, famously pledging to give away 99% of his wealth rather than creating a dynasty. 

Last month, he reiterated this stance, naming three independent trustees to manage his philanthropic efforts after his children. “I’ve never wished to create a dynasty or pursue any plan that extended beyond the children,” Buffett wrote.

With three children, now aged 71, 69, and 66, Buffett has acknowledged that his wealth may outlive their lifetimes. In 2024, he further cemented his philanthropic legacy, donating an additional $1.1 billion in Berkshire Hathaway stock to family charitable foundations.