What did Warren Buffet get for Christimas 2017 you may wonder? 1 million dollars!

As the Wall street Journal reports, in 2007 Warren Buffet bet a million dollars that a low cost S&P 500 index fund would outperform a collection of a Protégé Partners hedge funds over a decade. The bet was basically pitting the basic principles of passive and active investing against each other.

The final results saw Buffett’s fund have a compounded 7.1 percent annual return, compared to his opponent’s 2.2 average return.

The proceeds would go to local Girls Inc, a charity that will use the funds to renovate transitional housing for 16 teen girls who are aging out of the foster system, along with passive investments, as per Buffett’s advice, of course..   

Even better news, the pot was originally $1m, but years ago the money was put into Berkshire Hathaway stocks. That stock is now wart an estimated $1.7m.

Buffett and Protégé Partners originally put about $320,000 each into bonds that would appreciate to $1 million over the course of their wager. But the bonds appreciated much faster than expected and in 2012, they agreed to buy shares of Berkshire B shares. Those shares climbed a lot and after the last day of trading in 2017, those shares are worth $2.22 million. A very good news for Girls Inc and another point for the Low Cost Passive funds investment style!