11-Year-Old Warren Buffett Made a Big Mistake With His First Investment. Here's the Lesson That Helped Him Achieve a $145 Billion Net Worth.

Warren Buffett, president and CEO of Omaha, Nebraska-based holding institution Berkshire Hathaway, is 1 of the world's astir well-known investors, pinch a net worthy northbound of $145 billion.

Image Credit: Eric Francis | Getty Images. Warren Buffett.

However, for illustration each successful investors, Buffett had to commencement somewhere.

In his curriculum vitae The Snowball: Warren Buffett and the Business of Life, writer Alice Schroeder recounts Buffett's early fascination pinch money — and an important instruction he learned from his first investment.

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Buffett sewage his first sensation of entrepreneurship astatine property six erstwhile he started trading packs of chewing gum. "I would bargain packs of gum from my grandfather and spell astir doorway to doorway successful the vicinity trading this stuff," Buffett tells Schroeder. "I utilized to do that successful the evening, largely."

Eventually, the young entrepreneur moved connected to trading Coca-Cola, a much profitable task that earned him a nickel each six bottles. Selling play balls astatine the Elmwood Park play people and peanuts and popcorn astatine the University of Omaha shot games followed.

One day, Buffett visited the room and stumbled upon a book called One Thousand Ways to Make $1,000, which opened his eyes to the power of compound interest. Buffett wanted to effort it for himself.

Related: Want to Become a Millionaire? Follow Warren Buffett's 4 Rules.

By the pursuing year, 1942, 11-year-old Buffett had saved $120 to acquisition his first stock: Cities Service Preferred. He took his sister Doris connected arsenic a partner and purchased 3 shares for each of them for $114.75.

Unfortunately, the marketplace deed a debased that June, and Cities Service Preferred plummeted from $38.25 to $27 a share, a truth that Buffett's sister "reminded" him of each day, Schroeder writes. So, erstwhile the banal had recovered capable to nett a mini profit — $5 a stock — Buffett sold.

Then, Cities Service Preferred skyrocketed to $202 a share.

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Buffett tells Schroeder the acquisition was 1 of the astir important of his life because it taught him 3 lessons astir investing:

1. Don't "overly fixate" connected what you've paid for a stock.
2. Don't unreserved to waste for a mini profit.
3. Don't put personification else's money unless you cognize you tin succeed.

The instruction has served Buffett, now 94, good complete the years. In August, Berkshire Hathaway surpassed $1 trillion successful marketplace value for the first time.