2006 年 Charlie Rose：Warren Buffett, Pt. 3

Warren Buffett, Pt. 3

Wednesday 07/12/2006

https://charlierose.com/videos/18066

In the final part of our series on Warren Buffett, he and Bill and Melinda Gates talk to Charlie about Buffett's unprecedented philanthropic donation to their foundation as well as their longstanding friendship.

Charlie Rose: but not quite at that level. Warren Buffett, Bill and Melinda Gates, next. On June 26th, 2006, Warren Buffett, Bill Gates and Melinda Gates came to New York to make an historic announcement, that Warren Buffett was giving $31 billion to the Bill and Melinda Gates Foundation. The logical question is why?

Warren Buffett: It's something I've always planned. My wife Suzie and I planned that whatever I made would go back to society, and - and originally I thought she would outlive me and that she'd make the big decision on it, the manner. But - but since her death, I had to - had to rethink the best way to get the money into society and have it used in the most effective way. And I had a solution staring me in the face. I had seen Bill and Melinda do what they have done with their foundation. They've - you know they've done it with their own money. They poured themselves into it. The decisions are great. Their goals are similar to mine so - so the time is now.

Melinda Gates: Well, for us it's just fantastic because we look at it as doubling the impact. That visas we've already been working on and the education and the inequities we've been looking at for so long, just basically doubled by Warren's gift. And it's incredible the depth that we'll be able to go to on some of these global health issues.

Charlie Rose: Bill?

Bill Gates: Well, it's a huge responsibility. In some ways if you make mistakes with your own money, you don't feel as bad about it as if it was someone else's. So, now we're, you know, even more intent on doing it right. And it's a very exciting time. The advances in medicine and other things we can do to relieve poverty. We've - we've been making good progress. And with the doubling of resources, we - we think our impact can even more than double. And so it's - it's thrilling but it's a huge responsibility.

Warren Buffett: Well, I began to mull the various possibilities. And I wanted the money to be used effectively. And - and I've looked at a lot of foundations, Charlie. And there are number that I admire, but there's none that in the same class in my view as the Bill and Melinda Gates Foundation. And not just because of size. They really have looked at the world without regard to gender, color, religion, geography. And they said how can we do the most good for the most people and particularly to the people that have -- have gotten the short straws in life. And - and so I - I mentioned that I was thinking about it to Bill many, many months ago.

Charlie Rose: Yeah.

Warren Buffett: But I still was playing around in my mind the best way to do it, because I wanted something that would work well for the Berkshire Hathaway shareholders as well as for the people who were going to be the beneficiaries of the money. And - and finally I came up with this plan. And when I - when I decide on something, you know, I'm ready to go.

Charlie Rose: This friendship that led to this remarkable gift had an interesting beginning. Take me back to the first time the two of you met.

Warren Buffett: Well, he didn't want to come. Let's start with that.

Charlie Rose: You didn't want to come meet Warren Buffett?

Bill Gates: Well, I wasn't sure what I was going to talk to him about. And I was very busy, but my mom had a great group of people coming out, including Kay Graham and Warren, and kind of insisted that I come out there. So I actually took a helicopter out thinking, OK, once I've done what my mom expects, a couple of hours, I'll - I'll be back to my work. But then it was fantastic.

Charlie Rose: I want to get to fantastic. But why didn't you want to meet Warren Buffett?

Bill Gates: Well, I am --

Warren Buffett: Everybody wants -- all my life I have been looking for somebody who didn't want to meet me.

Charlie Rose: No, we found the first person who didn't.

Bill Gates: No, I was just a heads-down software engineer.

Charlie Rose: Right.

Bill Gates: And I wasn't quite sure that he'd be interested in what I was interested in. But then, you know, as soon as we met, talking about companies and trends and things, you know, we could have gone on for days.

Warren Buffett: We couldn't - we couldn't stop.

Charlie Rose: But what was that conversation about?

Warren Buffett: Abou everything in the world.

Charlie Rose: Business and --

Warren Buffett: Yeah, everything in the world. I was interested in what he was doing. He was interested in what I was doing, and we were both interested in what the world was doing.

Charlie Rose: How did the friendship evolve? I mean, you knew right that night there was something special --

Warren Buffett: Yes.

Charlie Rose: An affinity. What?

Bill Gates: Right. That - that it would be a lot of fun if we could have a chance to talk more and see how the world evolved. And it was just a few weeks later that I got to come to a gathering that Warren was having of a bunch of his friends and sit around and talk about things like, you know, why one session was about the companies that were most valuable in 1960 and 1970 and 1980 and how that had changed and should people have been able to see that and why those things happened, you know, why did the companies on the top not been able to maintain their strength?

Charlie Rose: Most people have -- you and I have talked about this before -- a few friends in which the friendship is so rare, it's almost beyond definition. This is one of those.

Warren Buffett: That's what you want in life. I mean, if you have a dozen terrific friends in life, I mean, you've got a great life, Charlie. That's true. And - and - and you don't get that many shots at it. I mean, you've got to - you've got to be - or that you just have to be in sync. And you know when it happens. And I've been blessed with a number of them, and then the --

Charlie Rose: (inaudible).

Warren Buffett: Yeah, absolutely. Absolutely.

Charlie Rose: Different age.

Warren Buffett: Yeah, right.

Charlie Rose: Different areas of the country. Different educational experiences.

Warren Buffett: Right.

Charlie Rose: But at the same time, it has what?

Warren Buffett: It just -- it works. We find each other interesting. We find each other funny sometimes. And I - I can't recall a time when in any kind -- I mean, we go on trips together and different things, but I can't recall a time when we didn't have a good time together.

Charlie Rose: Pull jokes on each other?

Warren Buffett: Me -- he pulls them on me.

Charlie Rose: Tell me about the time there was a dinner somewhere.

Warren Buffett: Yeah. It was in Carmel.

Bill Gates: And we had a group of friends who were traveling around the country a little bit. And we had gone to this resort, and we said to the friends that unfortunately we couldn't take over the whole dining room that night, that there was a couple who would have to sit with us because they - they traditionally always came that time of year. And so this couple started to drink a little bit, and a little insulting to the people that --

Charlie Rose: This is not the version I've heard. He was insulting, you know, the University of Nebraska.

Warren Buffett: The guy was slobbering all over everybody. And his wife was - and his wife was sitting next to me. And I wanted to punch her. And the owner had set me up for this, because he called Bill over. He said, gee, this couple showed up, you know, we weren't expecting them. Bill very graciously said, well, they can join us. So, they were getting more and more and more obnoxious. And - and the guy is sitting straight across. And at some point he says, where are you from? And I said Nebraska. And he is insulting Bill too. But he - and he says, oh, that's where the convicts play football. At that point, I just walked off --

Charlie Rose: When you insult the Cornhuskers --

Warren Buffett: Yeah, he said he was from Colorado too.

Bill Gates: He knew the fight song and made fun of it. Well, anyway, it turned out they were comedians we had hired --

Charlie Rose: You'd hired?

Bill Gates: We had prepped them for all the things that our guests might be sensitive to.

Warren Buffett: But we all fell for it.

Charlie Rose: Did you try to get back at him for that? I mean --

Warren Buffett: Who knows what I'll do.

Charlie Rose: The night is young.

Warren Buffett: You'll read about it in the paper, Charlie.

Charlie Rose: Most friendships come in a variety of ways. Is there competition here between the two of you?

Bill Gates: No, that's one thing that's nice. The only area we ever overlapped in was in encyclopedias.

Warren Buffett: That's true.

Bill Gates: And that was kind of fun, because Warren would say that his encyclopedia smells better than ours. You know, even though ours is a little CD. So, he put --

Warren Buffett: Yeah, a little

Cd A Little Cd: You were selling books and he had a little CD.

Warren Buffett: And I said we were developing this musty old smell that would kill him.

Charlie Rose: But no competition at all?

Warren Buffett: Not at all. Not at all.

Bill Gates: We have - we have a $1 bet.

Charlie Rose: You can play - play bridge, and you play golf.

Warren Buffett: We play bridge and play golf. We have a dollar bet when we play golf.

Charlie Rose: You're adding to his net worth, are you?

Warren Buffett: Well --

Charlie Rose: -- or vice versa?

Warren Buffett: Yeah, yeah - I think, well, lately I've been adding to his.

Charlie Rose: But competition just in that way.

Bill Gates: Well, usually in bridge we play on the same team. It's only in golf --

Charlie Rose: Yeah.

Bill Gates: -- that we sometimes get to win or lose a dollar against each other.

Charlie Rose: Did he get you to play bridge?

Bill Gates: I had played growing up, but there's no doubt I'd sort of given it up. And my re-addiction and seriousness about bridge came because it was something Warren enjoyed doing. And I got drawn in. Warren has friends that I got to know who are very good bridge players. And it's an incredible game.

Warren Buffett: Bill and I have worked on projects, or talked about working projects. I mean, (inaudible). Now, the problem with the game is, I was talking to Bill about this, you've got to play for or work at it for 30 hours maybe before you know what the game is all about. Now, from that point, you just - it's nothing but fun and --

Charlie Rose: But the learning curve --

Warren Buffett: Yeah, but the first, you don't learn it in an hour, two hours or three hours. So - so people really have to stick with it while they're kind of confused and get through that period.

Charlie Rose: Learn the language.

Warren Buffett: And a lot of people -- you see, when my daughter Susan and her then husband Alan, they took bridge lessons for a while, but they just didn't cross, they didn't get that far.

Charlie Rose: Yeah.

Warren Buffett: They didn't cross the line.

Charlie Rose: What have you learned from this young man?

Warren Buffett: All kinds of things, Charlie. I mean, obviously, in his own field I've learned things from him. But you learn from all your friends. And you learn good things. That's - that's the nice thing about friendships. So, it's -- you know, it's a continuous process.

Charlie Rose: You and I much have talked frequently about values --

Warren Buffett: Right.

Charlie Rose: -- some sense of how important it is.

Warren Buffett: Yeah.

Charlie Rose: You have to share values.

Warren Buffett: Right.

Charlie Rose: Otherwise there's no --

Warren Buffett: Yeah.

Charlie Rose: You know, sense of integrity or sense of -- but also a sense of - of the way -- he is --- are you the student in this relationship?

Warren Buffett: No, no.

Bill Gates: As much as I can be. Absolutely. I would say yes.

Charlie Rose: Because you once said to me, I study him.

Bill Gates: Well, I've learned an incredible amount from Warren. And some of them are things you can express, like, you know, really looking at the time on your calendar and valuing having as much free time as you can. I love it when Warren gets out his calendar book.

Charlie Rose: There's nothing in there.

Bill Gates: Empty days in there. And I think --

Warren Buffett: I put (inaudible), just to show that somebody knows I'm still alive.

Bill Gates: That is the way - the way to do things.

Warren Buffett: But Bill, I mean, I - I consider, for example, I consider Bill, it's not only the size of the Gates Foundation, but I consider it the best run philanthropy in the world that I know about. I mean, I really admire what he's done in the last-- and Melinda with him -- in the last five years. So, it's - you know, I'm learning from him all the time.

Charlie Rose: But in a sense of how he's approached philanthropy in the --

Warren Buffett: Just how he thinks.

Charlie Rose: But you'd probably talked to him about that too. Don't you?

Bill Gates: We've had a lot of fun talking about philanthropy. In fact, the idea that giving money to children could actually be a detriment to them. I hadn't started thinking about that. And then when I first met Warren and, you know, he said that - that was going to be his approach, that really convinced me, that made sense. Then of course, it created the issue of how to give it back in the best way.

Warren Buffett: His kids still like me, incidentally.

Bill Gates: Wait until they grow up.

Warren Buffett: Yeah

Bill Gates: Yeah.

Charlie Rose: Here is some ice cream. Don't worry about the (inaudible) --

Warren Buffett: Yeah, the fact that he just cut them out of the will --

Charlie Rose: There is no more. There's only a modicum amount coming.

Bill Gates: And my daughter refers to Warren as the man who works at Dairy Queen.

Charlie Rose: Don Keough refers to him -- his kids used to refer to him as the man who was upstairs playing with trains.

Warren Buffett: Playing with trains, yeah.

Charlie Rose: It's a strange life you've led.

Warren Buffett: I'm big with kids.

Charlie Rose: But the difference about philanthropy, which everybody talks about and everybody is admiring of the way you did it and - and how you came to it, what have you learned other than the way he's approached it and how he has organized to do it and Melinda, of course, together?

Warren Buffett: They're both incredibly rational in terms of thinking, you know, what -- what can produce the best results from society for society from this significant chunk of money? And so they - they set a framework first, and then they both become extremely smart about the best way to execute within that framework so as to get the best results. And - you know, they're both young. So the world is going to benefit enormously, you know, for decades. But I've seen a lot of people give away money and some of them -- and there's nothing wrong with any of the ways as far as I'm concerned -- but people generally aren't as thoughtful about it, in my opinion, as - as Bill and Melinda have been. And - and they get better at it all the time.

Charlie Rose: Is it also part for both of you, in a sense that if there is two people who have certain similarities in terms of wealth and then certain similarities in terms of IQ and intelligence, there is someone who you feel comfortable with that you can express ideas to and bounce things off, with respect?

Warren Buffett: Well, we're totally comfortable with each other. Yeah. You don't -- I mean, you don't have any worry about violation of confidence or misunderstandings or anything of that sort. So as it --

Charlie Rose: And someone who can grasp the idea that you think about.

Warren Buffett: Oh, yeah. Right. Right.

Bill Gates: That's right. When there's something that I don't get in business, it seems strange to me. I love to say to Warren, does this seem strange to you too? You know, why does it work this way? Why is - you know, this business like this and this other one like that? And it's so much fun to - to think about why that might be and explore it. And Warren will send me lots of articles, you know --

Charlie Rose: Rip - rip various things out -- You're reading something --

Warren Buffett: Yeah, I just write right on the publication, yeah.

Charlie Rose: And send it to Bill?

Warren Buffett: Yeah.

Bill Gates: It's the low-tech approach to email.

Warren Buffett: I don't send emails.

Charlie Rose: You know, I was going to ask that. Why don't you guys email each other?

Bill Gates: Well, I can email to his administrative assistant. And sometimes she'll - he'll have her email stuff to me. So --

Charlie Rose: But you don't put your hands on the keys.

Warren Buffett: It's all a mystery. I don't know what's going on out there.

Charlie Rose: It's not a mystery.

Bill Gates: That's part of his act.

Charlie Rose: He has said Bill can do everything I can do.

Warren Buffett: That's true.

Charlie Rose: But I can't do some things he can do.

Bill Gates: Oh, that's not true.

Warren Buffett: It is true.

Bill Gates: That's not true. Now, it is interesting how - how curious minds have a few things they're very good at in a special way. Like Warren looking at values and companies. And then -- but that - that intelligence can apply to a lot of interesting problems. And, so each - and have domains that we're very focused on our whole lives, which I think helps - helps you to be good at something. But then we're interested in all the things about business and politics that our experience in our special areas give us some - some ability to think about those.

Charlie Rose: Has he led you to sort of investigate Ben Graham and try to understand what it is that is at the core of his fundamental outlook about investing?

Bill Gates: Definitely. Soon after I met Warren, I went back and read "The Intelligent Investor." I said, oh, this is about bond yields. I mean, this is pretty basic here.

Warren Buffett: That's why he doesn't go into competition with me.

Charlie Rose: It - it is also part of the lore of the two of you. You have never invested significantly in Microsoft.

Warren Buffett: After I met him, I bought 100 shares. No, it - it's - it's --

Charlie Rose: He's spent a day explaining his company to you.

Warren Buffett: Yeah, well, if I had -- if somebody told me I had to bet on anybody or any company in the business, that's the one I would have bet on. But it's just not a business or an industry where I think I can see 10 years out as to how the world --

Charlie Rose: Change is happening so fast.

Warren Buffett: Yeah.

Charlie Rose: And if change is part of a business, then you're a little bit --

Warren Buffett: Maybe I think I'm 60 percent sure of the answer or 65 percent sure, but when I can go some place else and think I'm 95 percent sure, that's where I'm going to go.

Bill Gates: And I've never, you know, said to Warren he should buy Microsoft. It does not fit his model. Technology is - is a sorting game. It makes it fun to be part of.

Charlie Rose: Yeah.

Bill Gates: And it means when you do get things right, the returns can be pretty phenomenal. But --

Charlie Rose: That means -- Phenomenal would be what the returns are.

Bill Gates: You know, the history of our business is where fantastic companies -- Wang, Digital Equipment --

Charlie Rose: Right.

Bill Gates: -- missed a turn in the road and off they went.

Charlie Rose: Right.

Bill Gates: You know, so we all study those things.

Charlie Rose: So, he's right then, I mean --

Bill Gates: Oh, absolutely he's right.

Charlie Rose: With technology, there is change, and with change there is risk.

Warren Buffett: Change is wonderful for the world, but sometimes it's not so wonderful for investors.

Charlie Rose: His friends have said to me, Carol Loomis and others, that what he understands better than anyone is price. Ben Graham understood that too. Cheap price.

Warren Buffett: Value.

Charlie Rose: Value is a better word.

Warren Buffett: But he did use --

Charlie Rose: Yeah. And you -- tell me some of the other things that -- about him that you haven't seen or you rarely see in a businessperson?

Bill Gates: Well, when there was a crisis at Salomon, Warren got called in over the weekend. And during that course of the weekend, he had to explain to regulators why they shouldn't shut the place down.

Charlie Rose: Why the shouldn't shut it down, yes.

Bill Gates: Because it would have created this financial crisis. He had to go in and pick a new CEO. And he had to deal with all the questions the press might ask about what had taken place there. No one else could have done that. You know, he picked a fantastic person to lead - lead the company. He got the regulators to understand the chain of events. And there were many different regulators, some of whom weren't that easy to get a hold of. You know, that's - that's just a unique thing. The world - it's very lucky that Warren had enough of a connection so that he could be called in to put out something that could have turned into a real problem.

Charlie Rose: And that's about judgment.

Bill Gates: Judgment of people. Judgment of values. Ability to communicate. It's part of the story is he gets someone on the phone and says, this is maybe one of the most important phone calls.

Warren Buffett: I said it's the most important day of my life.

Bill Gates: Yeah.

Warren Buffett: That call was with Nick Brady, who was then secretary of the treasury. And - and we had received this terribly adverse order from the Treasury, which would have put us out of business on a Sunday morning. The U.S. Treasury does not normally issue things on Sunday mornings. And Tokyo was going to open in the afternoon. And they were going to throw --

Charlie Rose: Yeah.

Warren Buffett: -- billions of dollars of liability at us. So, I spent that day trying to get that order at least modified. And - and the Treasury Department wouldn't tell me where Nick was, so I would call them but he had to call me back. And the phones didn't ring on Sunday, so there -- I had to stare at this damned phone to see whether a little green light would go on. But at one point I said to Nick, I said to Nick at one point, I've been trying to get through, you know, the problems we were going to have when Tokyo opened, which was at 6:00 in the afternoon. And I -- I made the statement, this is the - this is the most important day of my life. And Nick - and he knew me. And my voice was probably cracking and everything. And he knew that whether I was right or not, I believed I was right on that point. And he made a modification, which in effect allowed the firm to be saved.

Charlie Rose: Because he had confidence in you?

Warren Buffett: Well, he knew I wasn't --

Charlie Rose: Right, Bill? That's what it was.

Bill Gates: The integrity.

Charlie Rose: The whole sense of --

Bill Gates: Yeah.

Charlie Rose: Paul Murphy told me a story about you. This is amazing to me. When you invested in Cap Cities, you gave him, without telling him, voting rights.

Warren Buffett: Yeah, sure.

Charlie Rose: -- for the stock. Without telling him. I mean, this is a quality of a man.. You-- they don't come like this.

Warren Buffett: It's not -- Tom Murphy is the quality of man --

Charlie Rose: I know. But you had confidence in him.

Warren Buffett: Oh, absolutely.

Charlie Rose: But I'm just - the point of not telling tell him. I mean, you did it because it was the right thing to do, but -- I want to come back to another quality you believe strongly about, and I think Bill reflects that. It is this time management idea. I mean, you have - you try to tell people-- reflect on this -- the sense of how you -- this is a man with enormous IQ, you are a guy with enormous IQ. But there are a lot of people with big IQs who don't get as much accomplished, because of what? They're not?

Warren Buffett: They have a 500-horsepower motor, and they get a 100 horsepower out of it, you know, because they have all these things that are throwing sand in the gears. And it's - it's amazing how -- you see a lot of that on Wall Street. It's amazing how people, you know, can play three-dimensional chess and solve all kinds of tough problems get - get tied up in, you know, in sort of elementary aspects of behavior and all of that that are so self-destructive.

Charlie Rose: Beyond the business acumen, beyond the investment philosophy and execution, there is, it seems to me, and I just -- think about this, because you know him so well, better than anybody, or better than most -- that quality of someone who has formed a philosophy of life.

Bill Gates: Well, someone who loves life. I mean, a lot of people have a philosophy --

Charlie Rose: That's true. That's true.

Bill Gates: The thing that stunned me the most about after I met Warren -- of course, you know, that he was brilliant --

Charlie Rose: Right.

Bill Gates: -- and interesting but that he really was having fun.

Charlie Rose: Yeah.

Bill Gates: And that, you know, I - I know how to have fun, but not quite at that level.

Charlie Rose: So that's the thing that he gave to you, a sense of insight.

Bill Gates: Right. That if you pick the things where you can make a difference, if you pick your time the right way, you pick your friends the right way, you pick the things that you really can contribute to, that that can be so much fun. You know, I'm not as good at it as Warren. But that's one of the best lessons I've learned.

Charlie Rose: That sense of --

Bill Gates: That - that you can enjoy - enjoy these things.

Charlie Rose: Yeah.

Bill Gates: And it's --

Charlie Rose: But you - but you --

Warren Buffett: We're lucky, too, Charlie. You know, I mean - we're -- if we had been born in a different place or wired differently, I mean, if we - if we don't have fun, then something is wrong with us.

Charlie Rose: If the three of us don't have fun.

Warren Buffett: You're right. Exactly. Exactly.

Charlie Rose: Do each of you in a friendship that is so strong tell each other when you're wrong if you think you're wrong? Is it that kind of candor a part of this --

Warren Buffett: We wouldn't hesitate to do that.

Charlie Rose: If it was necessary. (inaudible).

Warren Buffett: Sure, sure.

Bill Gates: And anything that I'm troubled about, for example, when Microsoft was - was having some challenges in court, there were parts of that where just talking it through with Warren . . .

Warren Buffett: Yeah.

Bill Gates: -- you know, not that he would tell me necessarily to do something completely different, just to talk through, how should I think about it? You know, that was an incredible gift for me.

Charlie Rose: Did you buy your wedding engagement ring in Omaha, Nebraska?

Bill Gates: Absolutely.

Warren Buffett: Yeah.

Bill Gates: What happened was, Melinda and I were in California. And she thought we were flying to Seattle. And so when we started to land, I distracted her by saying that my schedule is really messed up, got her a little riled up about a schedule thing, so she wasn't noticing that we landed in Omaha.

Charlie Rose: She didn't look out the window.

Bill Gates: No - no. I had her - I had her distracted. So then when the jet landed Warren was there. And he took us over to Borsheims, and he had a little advice for us.

Warren Buffett: Yes.

Charlie Rose: What was the advice?

Warren Buffett: Well, I said, look, Bill, I said, this is none of my business, but - but I said, when - when I got married, you know, I spent 6 percent of my net worth on the ring. And I said, I don't know how much you love Melinda, you know --

Charlie Rose: But 6 percent is the place to start.

Warren Buffett: Well, let's quantify it.

Charlie Rose: And we have the ring just for you. You both -- you're at different stages in your life. You both can do anything you want to do, buy anything you wanted to. Life has been good in terms of family, in terms of --

Warren Buffett: Incredible.

Charlie Rose: The - the ovarian lottery has been good to both of you.

Warren Buffett: We - we won the lottery the day we were born.

Charlie Rose: Are you optimistic about America today?

Bill Gates: Absolutely. I'm optimistic about the entire world, and, you know, the United States as part of that. We won't on a relative basis be as unique as we had been, but our wealth will continue to go up. The medical breakthroughs, the computer breakthroughs that will let people pursue their curiosity. This is a great time to be alive. The improvements that will take place will be great for everyone.

Warren Buffett: Bill is an American, but he - he is basically a citizen of the world. I mean, he - he has a world view. He thinks that the child in India is as valuable as the child next door. And he lives it. And it comes out in how his foundation operates, and that . . .

Charlie Rose: Did you come to that because of - because of the obligation you put on yourself?

Bill Gates: Well --

Charlie Rose: In terms of giving away the money?

Bill Gates: The - when we thought about giving away the money, the issue of what is the greatest inequity in the world came up. You know, in our -- the United States has been great about thinking through gender equity, racial equity, you know, trying to reduce those things, but the idea that the greatest inequity was the lack of having health intervention that would let children live, it comes from a sense of - of trying to level things out and let these advances benefit the world broadly, 6 billion instead of just, say, one billion.

Charlie Rose: Anything else I should say about this friendship? I mean, it's so unique. And everybody is fascinated by it of what makes it up and how it's so satisfying for both of you?

Warren Buffett: Well, we're sort of the odd couple to the rest of the world, I'm sure. But nevertheless, it couldn't work better.

Charlie Rose: Warren Buffett made an historic gift of more than $30 billion to the Bill and Melinda Gates Foundation.

Warren Buffett: By letters which were delivered earlier today, I've committed 12,050,000 shares that are earmarked, held by me. But every July, I will be giving a million shares to the Bill and Melinda Gates Foundation. Did I say 10 million? I meant to say 10 million. And a million shares to the Susan Thompson Buffett Foundation, and 350,000 shares each to the three foundations headed by my children, Susan, Howard and Peter. And that will continue throughout my lifetime, subject only to one -- at least one of Bill and Melinda being active in their foundation.

Melinda Gates: Bill and I are absolutely honored and humbled by Warren's gifts. It's really unprecedented in terms of what we can do to do good in the world. And it's something that we take very seriously. We have -- feel an incredible responsibility. I think when you give away your own wealth it's one thing, but to give away the body of somebody else's life's work is really quite something.

Bill Gates: We've known Warren since 1991. And it was his thought that wealth should go back to society that got us thinking about doing our foundation the first place. And as that's grown, we've had a chance to share how that's worked out. I remember one time in 2001, where I got to give a talk to Warren and some of his friends about global health, and you know, how excited I was about the opportunity to do something there.

Charlie Rose: There is also this. A selfless act. I mean, didn't you have any great desire to see the Buffett Foundation and the Buffett Library and the Buffett this and Buffett that?

Warren Buffett: No. I like the Omaha Public Library.

Charlie Rose: What will be your role then? I mean, you'll be a trustee, but will you sort of what?

Warren Buffett: If I have any ideas, they can use me as a sounding board. They can use me any way they want to use me.

Charlie Rose: They're already doing that.

Warren Buffett: That's true. And so, there really -- it's not a big deal. But if I, you know, any time I can be helpful, fine. I won't get involved in their investments. That complicates life. So I'm just totally out of that game.

Charlie Rose: Are their priorities your priorities?

Warren Buffett: Overwhelmingly they mesh. Yes, or I wouldn't be doing it otherwise.

Charlie Rose: And you have the Susan Thompson Foundation looking at other issues and the kids' foundations, which are involved in a range of issues.

Warren Buffett: Sure. But I've seen what they're interested in. And I've seen the way they pour themselves into it.

Charlie Rose: Will you be able to do things that you couldn't before?

Bill Gates: Absolutely. In some ways, we have the challenge of success. That is, every time we get a new drug, then you have a much bigger problem of how do you get it distributed? How do you make sure it has the impact you have in mind? If you look at the top 20 diseases, there's at least 10 of those we're making very good progress and can expect in the next five to 10 years to have solutions. And so scaling-up is very important. In education, as you get one high school that's working well that's a model, you'd like to see that spread throughout the country. And so what we've got here is the opportunity now to really deepen and accelerate. We'll add some things that relate to poverty, but the top goal being going after the health and poverty issues, and then education is the second. That's not going to change.

Charlie Rose: You have found that, in fact, if you can change health, it will have an impact on how many children people have. It will have an impact on a whole range of other things beyond their health.

Melinda Gates: Absolutely. And I think what this allows us to do is deepen what we do in health. So we're already working on medicines for malaria or tuberculosis vaccine or an AIDS vaccine, we can also start to surround those program. You can't give somebody medicine if they don't have any food in their belly to eat, or if they don't have clean water. And so looking at some issues around, say, agriculture to help small farmers in Africa, give them drought resistant seeds for sorghum or help them get seeds that if there's a virus in their banana, doesn't spread from crop year to year, help them get their products to market and have more information. Helping them figure out ways that they can have clean water or healthy food to lift their family up, while we're also starting to solve some of these diseases I think is how we'll deepen the impact of what we're doing in health.

Charlie Rose: Is there and has there been any kind of dilemma between spending money in terms of the future, as you did with the grand challenge, and spending money today in terms of the logistics of getting existing drugs to people?

Bill Gates: Absolutely. I mean, we have finite resources, and there's a very healthy dialogue that goes on, where some say, hey, you ought to spend more on the immediate solutions, and others saying, no, you're kind of unique in being willing to fund the research, and so you should focus more on that. And that's great. Having that ongoing dialogue, people who disagree with this, getting the advisors to come in on those issues is very helpful. You know, take AIDS as an example. Spending money on prevention has this incredible impact, because every case you prevent prevents the cases that might have caused. But then you see the face of the tragedy, the people who are getting ill, and you want to have treatment getting to them as well. And so there's -- these problems are big problems that can absorb huge amounts of money. And in fact, that's why we need to work with governments and make sure they get involved. We've been very pleased to see many governments around the world step up and do more in this area of global health.

Charlie Rose: Was it important to you to be able to make this philanthropic gift and have it pay off immediately?

Warren Buffett: Well, you certainly want it to be used intelligently immediately. The pay-offs don't necessarily come that fast. And frankly, that's why they'll be a lot better at this than I am. I like immediate feedback. I'm the kind of guy, if I walk in the ice cream store, I want a triple dipper right there.

Charlie Rose: You don't want to (inaudible), yes.

Warren Buffett: And really, you have to have a longer view than that. You have to take delayed results in many cases. Now, they're going to be impatient to get the best results they can, but it's a different game in that respect. And they're very well suited for it.

Charlie Rose: You weren't convinced you'd be good at philanthropy, were you?

Warren Buffett: I think I'd be terrible at it.

Charlie Rose: Why? Other than the fact that --

Warren Buffett: I like the fast feedback, but secondly, it probably requires answering to a bigger constituency in a sense than I like doing. I like to look in the mirror and ask myself is what I'm doing OK? And there are a lot of people whose opinions I really don't want to listen to. So you have to be a little bit more diplomatic perhaps than I am. And I'm just delighted. Charlie, you know, as I said in that article, I mean, if you have got something important in life to do, let's say I was going to play the golf match of my life and I can get somebody to substitute for me like Tiger Woods, I would do it. And if I had to sing on television, you know, and I could just mouth the words and get Sinatra in the background doing it for me, I'd do it. So the idea that you have to -- you have various responsibilities in this world, and this money is a responsibility. But if you can get somebody better at doing something that needs to be done in your place, you know, that's -- I'm used to that.

Charlie Rose: People have been speculating, as you know, for a long time about why you haven't done this before. And you were saying you haven't done it before -- Suzy's death was one thing.

Warren Buffett: No, but if you go all the way back, Charlie -- I mean, Suzy and I decided when we were in our 20s that the money would go back to society.

Charlie Rose: When you told her you were going to be rich. One thing you could be sure of.

Warren Buffett: I was sure of it. She thought I was delusional. But as time went along, I managed to convince her. But you know, it was always going to society. There wasn't any question about that. Now, my logic -- but it also went down the grade of what I wanted to do -- but my logic was that philanthropic needs would be huge today, tomorrow, 20 years from now, 100 years from now. And if people were going to devote their money to philanthropy, the ones who were high compounders should take care of the philanthropy 20 or 40 years out.

Charlie Rose: That would be you.

Warren Buffett: Yeah, I really thought I, you know, it made way more sense than to give $1 million 30 years ago, which might have been all I would have had available, to have it compound. And people who were low compounders should take care of the current needs. I mean, if I ran a university and I had two wealthy alumni and they were going to supply all the money, I would take the guy who wasn't going to do much with the money and use his money currently, and I would have the other fellow compound for me. So anyway, it was a convenient way to think anyway. And you know, that has been my philosophy on it. But now is the time.

Charlie Rose: Do you think people are surprised you did this?

Warren Buffett: Probably. Yes.

Charlie Rose: When you made this decision, you had to ask yourself will there be consequences for this extraordinarily compounding that has been taking place? And will it affect Berkshire Hathaway stockholders?

Warren Buffett: Yeah. And I don't think it will one iota. As a matter of fact, 31 percent of the money that Berkshire Hathaway makes, if we can make another $100 million, 31 percent of it through my shares is going to philanthropy. So if there's any -- if you could have a greater motivation than I've had over the years -- I'm not sure you could -- but I would have it now. I mean, it's a great feeling to know that as the company becomes worth more and more money, that it actually translates into something good for people around the world.

Charlie Rose: So I know of no one who loves his work more than this guy does. He loves to tap dance to work, as he says. That will continue.

Warren Buffett: Yeah.

Charlie Rose: You'll go back to Omaha and tap dance to work and make these decisions, now knowing that you're not only benefiting the Berkshire shareholders, but also people's lives far away.

Warren Buffett: I knew it would benefit philanthropy eventually, but now it's very tangible. It's very tangible. And every year, I hope those shares that are committed to go that year are worth more money. And over time, you know, I think they will be. So this can be a lot bigger. And it's up to me to work to make it so.

Charlie Rose: But you do grow a great satisfaction from the fact that you have now made this decision and you know where it's going.

Warren Buffett: Absolutely, Charlie. I mean, it's the second act of the money, basically. You amass these claim checks in effect, which money is on society. And then you figure out the best use for them.

Bill Gates: The philosophy that Carnegie had in "The Gospel of Wealth." Warren handed that out at a get-together we had. And, you know, it really helped me think about philanthropy and how you ought to set very high goals.

Charlie Rose: This is before you created the foundation?

Bill Gates: That's right. The whole idea -- The whole idea of not, that leaving the wealth to your children might actually not be the best idea for society or for them, that came out of some things that Warren was talking about right around the time we met him. I was starting to think, oh, gees, this is a problem I'll have to deal with. Here is some very good advice about that. And now, here we are. But I do think energy and pulling people together the right way, getting partners to work together in new ways, it's what's allowed us to move as fast as we have.

Warren Buffett: Charlie, I've, you know, in business I've had a great partnership with my partner, Charlie Munger. And I've seen what happens when you get two people together that, you know, that are totally in sync but also have different ways of looking at things, but are working toward a common goal. And you could not have a better pair than Bill and Melinda running a foundation.

Charlie Rose: I wonder, do you think you'll be drawn into this and so his involvement will deepen?

Bill Gates: A little bit. I think Warren would be an incredible philanthropist, but he loves his job and that's what he's going to do full time.

Charlie Rose: But you love your job and you have misgivings about leaving Microsoft.

Bill Gates: No, I do. This is a tough one. It's unusual to have two things that you love and that you think are important and challenging. And so I've had this debate for several years. And I wanted to be very explicit about the change, and I don't even know what it will be like, but I'm very excited about it. And this just reinforces the importance of having that time and spending it well. But we had Warren at a discussion about microfinance about a month ago. And you know, it was great talking with these bankers. You know, Warren was asking about their costs and did people repay the loans. And so we're going to draw him in a little bit. We'll do our best.

Charlie Rose: I'll bet. You said it famously about children, your own children, who you've done wonderful things and created foundations for them.

Warren Buffett: I'm very proud of them.

Charlie Rose: Exactly. You're very proud of them. And they feel the same way about you. That you wanted to leave them enough money so they could do whatever they wanted to do, but not do nothing.

Warren Buffett: Yes, they can do anything but not nothing. I don't believe in dynastic wealth. I mean, if you contrast -- it's nice to leave something to the kids. I can understand a person who wants to leave their farm or a small business they built and all of that to their children. But dynastic wealth, the idea that many generations should be able to go without doing a thing if they wish, simply because they came from the right womb, I mean, that really strikes me as flying in the face of what this country is about. I mean, we believe in a meritocracy and equality of opportunity, and dynastic wealth flies in the face of that. So I really felt that if you have a choice between having a foundation like this doing tremendous things for people all over the world or having a bunch of people, you know, as they say, that came from the lucky sperm club.

Charlie Rose: The ovarian lottery. Now, you've mentioned Charlie Munger.

Warren Buffett: Yeah.

Charlie Rose: You called him up and said I'm thinking about doing this. What was his reaction?

Warren Buffett: He said, you finally have a good idea. I've been waiting for that for years.

Charlie Rose: Did he really?

Warren Buffett: More or less, yeah. Bill and I sort of have a background mind-set of a market system. And a market system works awfully well. It's worked well in this country, but a market system has not worked in terms of people, poor people around the world with a disease that should be available for just peanuts.

Charlie Rose: It doesn't work because the people cannot afford to participate.

Warren Buffett: The market system just fails in that case. And you have to interject yourself into that, and make sure there is a system that will deliver. I'm a big believer in the market system 95 percent of the time. But the -- it's done pretty well for me.

Charlie Rose: And the world.

Warren Buffett: And the world. Absolutely. But there are things where the market system is not going to solve the problem. That's where Bill came in on this.

Charlie Rose: You have said to me in other conversations, you know, when you were thinking about what foundation you might be involved in, not in terms of choosing one but in terms of what your money might -- that you wanted to choose things that have perhaps been neglected.

Warren Buffett: If the money is pouring into something and talent, you know, there's really no reason to duplicate. There's millions of good things to do in the world. And you're looking for something that's important. You're looking for something that you'll be reasonably good at in terms of implementing any ideas that do come to mind, and you're looking for something that really needs more funding. And that's exactly the way that Bill and Melinda have come at the problem.

Charlie Rose: You know who Bill and Melinda can certainly speak to this, who would love this is Suzy. I mean, the idea of what you have done.

Warren Buffett: Yes.

Charlie Rose: Because she said to me, you know, I mean, I'm always wanting him to do more.

Warren Buffett: You know, I was out -- I was not holding her back, we'll put it that way.

Charlie Rose: Holding her back from speaking her mind or giving away --.

Warren Buffett: No, her -- no one could have had better instincts about doing it. And she would have liked to have started much sooner, and as soon as it could be done on a good scale. And I wouldn't quarrel with that. She saw people one at a time. And she saw them with needs now. And she was hit by that, obviously. So I mean, I don't disagree with that. It was perfectly natural for her to react that way. And if she -- if I died when I was 60 or something, there would have been a lot of money then, I mean, she would have really gone to town with it.

Charlie Rose: And you would have been pleased that she would be running a foundation dedicated to that.

Warren Buffett: Absolutely.

Melinda Gate: And she cared a lot about these issues. I mean, she talked enormously about women lifting themselves up in their situation, and particularly having access and tools to family planning was something she was very interested in. And she traveled extensively, especially to Vietnam and a lot of places in Southeast Asia. So she cared a lot about these inequities. And I keep thinking how pleased she would be that Warren made this decision.

Charlie Rose: You hope in what way this will in a sense spur other wealthy people?

Warren Buffett: When people are thinking about amassing wealth, they frequently go to somebody else that they think knows more about it than they do, and join in. I mean, 50 years ago -- 50 years ago last month, I started a partnership, and seven people gave me $105,000. Now, why did they do it? They thought I would be better at accumulating money for them than they could themselves.

Charlie Rose: Good bet.

Warren Buffett: Well, it has worked out OK. But why not apply that same thinking when you're eventually dispersing wealth? I mean, the idea that your old business cronies or some local pals at the country club or whomever, or even a professional staff that may take over the agenda, the idea that you can't also apply that same theory of getting people that are better than you are at doing something in dispersing wealth as well as in amassing wealth, I think it's sort of obvious. So I would hope that people even of modest means, that don't have something specific that they really want to do -- and if they have something specific, God bless them. I mean, if they have their alma mater or whatever. But if they really are sort of groping for what to do with far more money maybe than they ever anticipated that they would have, they can look around. It doesn't have to be the Gates Foundation at all, but they should look around for somebody that they think will do the job better than they can do it themselves, that has somewhat similar goals, and turn the money over to them. I think it makes nothing but sense.

Bill Gates: When we described to a friend what Warren was doing, we were saying, wow, this is an amazing thing that the two of you met and that this could come together. And they acted like it was almost obvious that this would happen. I have to say to me, it wasn't. I mean, when Warren first mentioned it, it was like, wow, is he serious about that? Wow, are we ready for that? And you know, it's only hitting me today. I mean, this is the day Warren is going to actually sign these letters.

Charlie Rose: But how long ago was that, Bill? Do you remember? When he first mentioned it to you?

Bill Gates: Over the last year-and-a-half or so, he mentioned in. And at first, it was just kind of in passing, just a very nice thing, that gosh, your foundation is doing well. And we had had that ongoing dialogue. It was in the last few months that it was clear he was getting very serious. And with Warren, once he decides something, it's very crisp.

Charlie Rose: The other thing I know about you, once you make a decision, you don't look back. You have not lost one moment of sleep because I might be doing the wrong thing, maybe, maybe, maybe, nothing?

Warren Buffett: Nothing.

Charlie Rose: Do you wish you had done this earlier?

Warren Buffett: No, I really don't. I think this is the right time.

Charlie Rose: This is the right time to do it?

Warren Buffett: Yes, I do, Charlie. I've had a good chance to see what they've done. I feel Berkshire's position better than ever for the future. One thing about it, if I had given the stock in a lump amount, there might be people that say they were too concentrated in one stock and that sort of thing. Well, I want the well-being of their foundation to be sort of concentrated in Berkshire, because I think it's going to do very well. So I wouldn't want them to be forced to sell it and buy government bonds or something of the sort. So this way, I think -- I don't see how it could be any better.

Charlie Rose: How will this change your life day to day?

Warren Buffett: Zero.

Charlie Rose: Zero. You go back to Omaha, and you tap dance to work. Get on the phone -- Bill once said to me, you do three things. You talk on the phone. You read. You play bridge. And then watching the cable television shows you like.

Warren Buffett: What else is there in life, Charlie?

Charlie Rose: Well, I'll tell you what else there is in life. There is the satisfaction to know and to see that you can while you're alive -- not when you're dead and not among executors -- that you can do something that you can see because it's already taking place. Changing lives, saving lives.

Warren Buffett: And see it getting done right, which is really sort of --

Charlie Rose: Make accommodations, yeah. This is a great day for you.

Warren Buffett: It's a great day.

Charlie Rose: It really is. When you think about this gift and the reaction to it, which has been overwhelming, tell me how --.

Warren Buffett: Well, I've been surprised at the reaction, Charlie, because what else could you do in my position that made as much sense? I mean, it isn't like this required any brilliance or anything. It was just the logical thing to do to get a great, I hope --

Charlie Rose: But I think that's an interesting point. Because a lot of people say it is only because of Warren that you would come to that kind of conclusion. No other foundations are giving their money to the Bill and Melinda Gates Foundation.

Warren Buffett: Well, they haven't yet. And it shouldn't necessarily be them. But the idea of getting somebody that's better than you are, younger than you are, spent more time at it, is going to spend more time and who has common ends to actually handle your money for you, people do it all the time on the accumulation side. Why not do it on the distribution side?

Charlie Rose: You said to me in another conversation -- and help me understand this -- you would give up -- the future was so exciting, you would give up a year or two or whatever, if you could know what was going to happen the next 40 years.

Warren Buffett: If I could be an observer. I would give up being a participant for a few years at the end to be an observer for 40 years.

Charlie Rose: Sit there and be --

Warren Buffett: I find the world so interesting. And there's so many things I want to see -- I'd like to see how they come out and how they play out and everything. Those last two years, I'm probably not going to be much of a participant anyway, but I would give up a few years as a participant to be able to sit in the stands for 40 years or 50 years and see how this game plays out.

Charlie Rose: Just th convergence of all the forces everywhere in the world --

Warren Buffett: Oh, everything. Everything going on.

Charlie Rose: And the extraordinarily technological advances.

Warren Buffett: The world -- it's going to change so much, Charlie. It may not be for the better, unfortunately. But I still would like to -- I'd like to see the rest of the movie or a good portion of it.

Charlie Rose: We conclude this three-part look at Warren Buffett with this observation. Here is a man of great passion for his work, of great love for his friends, and who will see his life's work have a tremendous impact on the lives of others. Thank you for joining us.