‘No downside’: Warren Buffett trusts 2 key assets for his grandkids — and says the income will likely jump for decades

‘No downside’: Warren Buffett trusts 2 key assets for his grandkids — and says the income will likely jump for decades Jing Pan Tue, August 25, 2026 at 6:15 PM GMT+2 7 min read GC=F BRK-B Paul Morigi/Getty Images Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below. Warren Buffett is best known as one of the greatest stock market investors of all time. But some of the investments he has spoken most glowingly about aren't stocks at all.

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B) shareholders, Buffett reflected on two personal investments he had made decades earlier — both far outside his usual world of publicly traded companies. While not as famous as Berkshire's stock holdings, Buffett has expressed unwavering confidence in these investments. "The two investments will be solid and satisfactory holdings for my lifetime and, subsequently, for my children and grandchildren," he wrote (1).

He also projected that the income from the two investments "will probably increase in the decades to come. " So, what did Buffett buy? The answer reveals a lot about how the legendary investor thinks about building wealth that can last for generations.

Buffett's 'no downside' investment The first opportunity appeared in 1986, after a bubble in asset prices had burst in the Midwest. Buffett paid $280,000 for a 400-acre property about 50 miles north of Omaha — considerably less than the amount a failed bank had previously lent against it. The asset?

A farm. The Oracle of Omaha admitted that he "knew nothing" about operating a farm. But his son had a passion for farming, and Buffett was able to learn about the farm's production of corn and soybeans and its operating expenses.

Buffett then calculated that the normalized return from the farm would be 10%. He also believed that productivity would likely improve over time and that crop prices would increase. He highlighted that "both expectations proved out.

" It didn't seem to be a hard decision to make, as he remarked, "I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside. " That confidence paid off. Buffett noted that the farm had tripled its earnings by 2014 and was worth five times more than what he paid.

Story Continues The lesson wasn't simply that farmland went up in value. Buffett focused on what the property could actually produce — and whether those economics made sense at the price he was paying. That gets to one of farmland's most enduring appeals: Come what may, people always need to eat.

Farmland also serves as a natural inflation hedge. During inflationary periods, rising food prices often drive up farmland values, helping preserve investors' purchasing power. These days, you don't need to buy an entire farm — or know how to grow crops — to gain exposure to the asset class.

FarmTogether gives accredited investors a way to invest in fractional ownership of U. S. farmland.

That means investors can potentially earn income from crop production while also benefiting from the value of the land if it increases over time. The platform has $217 million in assets under management across 51 funded deals, covering eight states and 15 crop types . FarmTogether says each offering goes through a 105-point due diligence process, and less than 1% of deals in its pipeline make it onto the platform.

Farmland has also historically held up differently than other assets during downturns. According to FarmTogether's own data comparing NCREIF indices from 1992 to 2025, returns from farmland have shown a lower correlation to inflation than stocks, bonds or REITs. The investment Buffett never even visited Buffett's second example came several years later — and once again, he went shopping after a bubble burst.

In 1993, Buffett learned about a retail property located next to New York University (NYU) that was being sold by the Resolution Trust Corporation (RTC) in the aftermath of the commercial real estate bust. The numbers immediately caught his attention. Buffett conducted his analysis and determined that the unleveraged current yield from the property was approximately 10%.

He noted that the RTC had undermanaged the property, and leasing the vacant stores would enhance its income. More importantly, Buffett identified a major opportunity: The largest tenant, occupying about 20% of the space, was paying rent of only $5 per square foot, while other tenants averaged $70. He wrote, "The expiration of this bargain lease in nine years was certain to provide a major boost to earnings.

" And then, there was the location. As Buffett memorably put it: "NYU wasn't going anywhere. " Armed with this analysis, Buffett joined a small group of investors to purchase the property.

The decision proved to be successful. "Annual distributions now exceed 35% of our original equity investment. Moreover, our original mortgage was refinanced in 1996 and again in 1999, moves that allowed several special distributions totaling more than 150% of what we had invested," Buffett wrote.

Perhaps the most Buffett-like detail of all? "I've yet to view the property," he said. Read More: Millionaires under 43 hold only 25% of their wealth in stocks.

Here's where their money is actually going How to add real estate to your portfolio The combination of rental cash flow and potential appreciation is precisely what has long made real estate a popular choice for investors. But buying an investment property yourself usually means coming up with a large down payment and taking responsibility for everything from vacancies to repairs. The good news?

You don't need to buy a property outright — or deal with leaky faucets — to invest in real estate today. Platforms like mogul offer an easier way to get exposure to this income-generating asset class. As a real estate investment platform offering fractional ownership in blue-chip rental properties , mogul gives investors monthly rental income, real-time appreciation and tax benefits — without the need for a hefty down payment or late-night tenant calls.

Founded by former Goldman Sachs real estate investors, the team handpicks the top 1% of single-family rental homes nationwide for you. In other words, you gain access to institutional-quality offerings for a fraction of the usual cost. Each property undergoes a rigorous vetting process, requiring a minimum 12% return even in downside scenarios.

Across the board, the platform features an average annual IRR of 18. 8%. Their cash-on-cash yields, meanwhile, average between 10% and 12% annually.

Offerings often sell out in under three hours , with investments typically ranging between $15,000 and $40,000 per property. Sign up for an account and browse available properties here to start investing today. Consider multifamily real estate Another option is to leverage multifamily real estate investing.

In a report (2) prepared by JPMorgan, Al Brooks — the firm's vice chair of Commercial Banking — said, "I think multifamily housing is absolutely where you want to be as an investor. " Accredited investors can now tap into this opportunity through platforms such as Lightstone DIRECT , which gives accredited investors access to single-asset multifamily and industrial deals. Lightstone DIRECT's direct-to-investor model ensures a high degree of alignment between individual investors and a vertically-integrated, institutional owner-operator — a sophisticated and streamlined option for individual investors looking to diversify into private-market real estate.

With Lightstone DIRECT, accredited individuals can access the same multifamily and industrial assets Lightstone pursues with its own capital, with minimum investments starting at $100,000. You May Also Like A single line on your car insurance policy could be inflating your premium by up to 30% — here's what to change Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake.   Here's what it is and 3 simple steps to fix it ASAP Robert Kiyosaki says China is 'dumping' the US as America piles on debt.

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Berkshire Hathaway ( 1 ); JPMorgan Chase ( 2 ) This article provides information only and should not be construed as advice. It is provided without warranty of any kind.