Warren Buffett’s First Business Exit: From $25 to $1,200 Before He Was 18

The teenage pinball hustle that taught Buffett scaling, reinvestment—and the art of selling at strength

Picture this.
You’re 17.
You’ve got $25 in your pocket.

Most teens in 1947 would’ve spent it on dates, clothes, or gas money.
Warren Buffett? He bought a beat-up pinball machine.

It wasn’t his first “investment.”
It was his first business.

From Farm Fields to Flippers

By this point, Buffett had already been through his trial runs:

• $114 in Cities Service stock → lesson in impatience.

• $1,200 in Nebraska farmland → lesson in productive assets.

But there was something those didn’t teach: scale.

He wanted to see if he could turn one dollar into many by building, not just buying.

Enter pinball.

The Pinball Hustle

Buffett teamed up with his friend Don Danly.
Together, they scraped together $25 to buy a single used pinball machine.

They fixed it up, dropped it in a local barbershop, and cut a deal:

• Customers could play while waiting for a haircut.

• The barber got a cut of the revenue.

• Buffett and Danly pocketed the rest.

It worked.
Within weeks, the machine had paid for itself.
Soon they reinvested the profits into a second machine. Then a third.

Before long, they had seven machines spinning nickels across Omaha barbershops.

The First “Exit”

After about a year, the duo sold the business to a returning war veteran for $1,200.

Think about that:
They turned one $25 gamble into a small fleet of machines…
…and exited for nearly 50x their original stake.

That wasn’t just pocket money.
That was Buffett’s first real taste of:

• Product-market fit.

• Scaling through reinvestment.

• Selling a business at a premium.

Lessons Hiding in the Pinball

This wasn’t just teenage mischief.
It was a business case study in disguise.

1. Start small, reinvest fast
   One machine → seven → a fleet.

2. Solve boredom, make money
   Barbershops had customers waiting. Pinball solved the problem.

3. Profit-sharing creates buy-in
   The barber wasn’t just a host — he was a partner.

4. Exit when the flywheel is humming
   They sold at strength, not weakness.

The Bridge Between Investor and Owner

The pinball hustle mattered for one reason: it proved Buffett could do more than invest in assets.
He could build systems that printed cash.

Once you know how to value assets and how to operate businesses, you’ve unlocked both sides of wealth creation.

Fast Forward

Decades later, when Buffett bought See’s Candies, Nebraska Furniture Mart, or GEICO, the DNA of that pinball machine was still in the deal:

• Buy cheap.

• Make it productive.

• Reinvest relentlessly.

• Incentivize operators.

• Build to last.

Final Thought

At 11, Buffett learned the cost of impatience.
At 15, he learned the power of productive assets.
At 17, he learned the art of building, scaling, and exiting.

That’s the trilogy.

The kid who started with one broken pinball machine…
…ended up building the greatest compounding machine in business history.

So here’s the lesson for you:
Don’t just park money. Build something.
Even if it’s small. Even if it’s scrappy.

Because the $25 bets you make today…
…can echo for the rest of your life.