At a meeting, Jeff Bezos once asked Warren Buffett, “Your investment strategy is so simple, and yet, you’re one of the richest people in the world. Why doesn’t everyone just follow your approach?” Buffett replied, “Because nobody wants to get rich slowly.”
Today at 94 years old, Buffett is worth $146.4 billion according to Forbes, making him the 10th richest person globally. This fortune comes after giving away $60 billion to charity since 2006, with his latest $6 billion donation last July bringing total giving to nearly $48 billion over 20 years. If he hadn’t been so generous, his net worth would reach $205–210 billion. Yet he still trails Elon Musk, who now stands at $788.8 billion and will become the world’s first trillionaire after SpaceX’s upcoming IPO at $135 per share valuing the company at $1.77 trillion.
Buffett’s success comes from two fundamentals: he invested regularly with decent returns and lived a long life. Berkshire Hathaway delivered 19.8% compounded annual growth from 1965, nearly double the S&P 500’s 10.4%. Over 60 years, Berkshire shares skyrocketed 5,502,284%, equating to 19.9% annually. At 10% annual return, close to the S&P 500’s historical average, every dollar invested today becomes $117 in 50 years.
The best results come in later years regardless of when you measure. Buffett started investing as a teenager but didn’t become a billionaire until age 56 in 1986 when his net worth reached $1.4 billion, quadrupling from $250 million in 1982. By age 72 his fortune hit $35.7 billion before exploding to current levels. A staggering 99% of Buffett’s wealth was built after his 56th birthday, not in his twenties, thirties, or even forties. Nearly 99% accumulated after he turned 50.
This proves getting rich slowly still gets you rich spectacularly if the timeline is long enough. Buffett has been tap dancing to work for decades with a philosophy of buying businesses with durable competitive advantages run by honest managers at sensible prices. His majority fortune of approximately $167 billion comes from his 37% stake in Berkshire, which represents roughly 99-and-a-half percent of his net worth.
Berkshire now holds $189 billion in cash, a record high, as Buffett finds few stocks worth buying at current valuations. The company reported $12.9 billion in investment gains last year including $9.6 billion in the fourth quarter alone. Revenue reached $367 billion up from $314 billion previously while net income hit $37.4 billion compared to $30.8 billion.
For investors patience remains key. Look for opportunities with long growth runways where wealth builds at high rates over many years. The market rewards those who stay invested. The S&P 500 was positive during 26 of 33 years between 1993 and last year. Top tech stocks accounted for 53% of the index’s 17.9% return last year driven by AI spending while corporate profits hit record highs.
Someone’s sitting in the shade today because someone planted a tree a long time ago. ― Warren Buffett.
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