The $5 Million Lunch That Changed It All: How Ted Weschler Met Warren Buffett And Built A $269 Million Retirement Account

Imagine starting with a $70,000 retirement account and watching it grow into hundreds of millions over the years. That’s exactly what Ted Weschler did. It wasn’t luck or flashy stock picks – it was all about strategy, patience and playing the long game.

ProPublica uncovered Weschler’s incredible financial journey in 2021 as part of its “Secret IRS Files” series. They analyzed federal tax records and found that his retirement account (IRA) stood out among some of the wealthiest Americans. 

While most people use retirement accounts to build modest savings, Weschler turned his into something extraordinary.

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His story begins in 1984, when Weschler was just 22. He was earning $22,000 a year as a junior financial analyst and decided to open a retirement account. Instead of contributing the bare minimum, he made the most of it – maxing out his contributions and taking advantage of his employer’s matching program. By 1989, his account had grown to $70,000.

But Weschler didn’t stop there. He transferred his savings to a self-directed IRA, which let him pick his investments. In 1990, though, his account hit a major bump, losing 52% of its value during a market downturn. 

Most people would have panicked, but Weschler later called it an “unmonetized lesson.” He stuck to his strategy, which focused on identifying undervalued companies and holding onto them long term.

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That patience paid off. Between 2000 and 2011, his IRA delivered an average annual return of 22% after fees – returns most investors can only dream about.

Then, in 2012, Weschler made a bold move: he converted his traditional IRA into a Roth IRA. It wasn’t cheap – he paid $28 million in taxes up-front – but it meant that all future earnings in the account would be tax-free. Financial experts have praised this as a smart long-term play, showing the value of thinking ahead.

Around the same time, Weschler made another bold decision. In 2010 and 2011, he bid a combined $5 million at charity auctions to have lunch with Warren Buffett. 

Buffett hired him in 2012 to manage investments at Berkshire Hathaway because those meetings made an impact. Since then, Weschler has been working alongside Buffett to find companies that fit Berkshire’s rigorous investment philosophy.

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Weschler’s advice for building wealth is simple. Start early, invest consistently and tune out the noise of daily market swings. He also recommends index funds for anyone who wants an easy, reliable way to grow their money. 

In an interview with the Washington Post, he pointed out that even if his original IRA had been invested entirely in an S&P 500 index fund, it would have grown to $1.6 million by 2021.

According to Fidelity Investments’ Q3 2024 Retirement Analysis, the average IRA balance in the U.S. is $129,200. The report also notes that the number of IRA millionaires has increased by nearly 5% to 418,111, thanks to consistent contributions and strong market performance.

While Weschler’s results are far from average, his discipline and long-term thinking principles remain relatable.

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