We know Bill Gates as one of the most successful entrepreneurs of all time. In 2016, he was also named as the richest man in the world with an estimated net worth of $86.5 billion.
Many people assume that his Microsoft shareholding accounts for the majority of Bill Gates’ wealth. Gates may have made his initial wealth through starting and owning Microsoft, but the software company’s stocks are currently less than 15% of his share portfolio.
Bill Gates met Warren Buffett in 1991, and they quickly developed a friendship. Buffett has shared his investment philosophies with Gates, and it was partly this advice that prompted Gates to sell a significant portion of his Microsoft shares and invest $5 billion in other stocks in 1995.
Gates hired Michael Larson of Cascade Investments to manage his portfolio and implement an investment strategy focused on long-term investments in market-leading companies that provide income through dividends.
Bill Gates’ Top 5 Stocks
These are the top five stocks in Gate’s portfolio which have played a fundamental role in growing his fortune from $5 billion to $86 billion over the last 22 years:
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Berkshire Hathaway (59,43%)
Not surprisingly Warren Buffett’s company is the largest holding in Bill Gates’ portfolio. While Berkshire does not pay dividends it is described by investment blog, Motley Fool, as “among the strongest companies around, with a well-diversified revenue stream, rock-solid balance sheet, track record of strong cash flows, and management’s staunch commitment to growth.”
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Waste Management (6,95%)
America’s largest waste hauling, disposing and recycling company, Waste Management, has increased its dividend payments for the last 14 years in a row as it can maintain its margins even during recessions.
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Canadian National Railway (6,07%)
Rail still plays a vital role in the movement of goods across North America, and this is one of the most extensive networks, making it a dependable investment that has paid dividends for 21 years without interruption.
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Caterpillar Inc. (5,49%)
Caterpillar has a strong brand that is recognised globally, it is the leader in mining and construction equipment and has paid dividends every year since 1925, regardless of political and economic cycles.
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Wal-Mart Stores (4.22%)
Wal-Mart is the largest company in the world by revenue and it has paid dividends for the last 44 years.
Also worth a mention is his holding in Arcos Dorados is the largest McDonald’s franchisee in the world as measured by total sales and number of restaurants. The company has exclusive rights to own and operate McDonald’s franchises in 20 Latin American and Caribbean countries, including Brazil and Mexico and operates over 2100 restaurants.
Bill Gates clearly understands the key ingredient to real wealth is owning assets that produce cash without ever having to sell the investment, thus providing you with the means of growing your wealth beyond your lifetime.
At AXIAM, we have spent many years growing wealth with an investment strategy inspired by the wisdom of great investors like Warren Buffett. We buy shares in companies that pay regular, increasing dividends, because they own great brands that are known, loved and used around the world daily and we keep them for a long time. Sign up to our newsletter or follow us on Twitter to learn more about investing like Bill Gates or contact our fund management team to invest.