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For decades, Berkshire Hathaway’s annual meetings gave shareholders the opportunity to pick former CEO Warren Buffett’s brain on a variety of topics.
But one investor who attended the conference in 1999 gave up pursuit.
“Mr. Buffett, How Do I Make $30 Billion?” He asked (1).
lifts up
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As always, the Oracle of Omaha expressed complex answers in simple words. Here are three important rules that helped a 95-year-old man amass huge wealth.
start young
Buffett’s best advice for investors is to get started as early as possible. He has a simple metaphor to explain his wealth-building strategy.
“We started with a little snowball on top of a very high hill,” he said. “We started the snowball rolling at a very young age, and of course, the nature of compound interest is that it behaves like a snowball.”
The length of Buffett’s career is a significant part of his vast wealth. He bought his first stock at the age of 11. He is now 95 years old and is still actively investing.
Most of Buffett’s wealth was accumulated after he turned 65. In 1999, his net worth was only $30 billion. Today, he is the 11th richest person in the world with a net worth of $140.6 billion(2).
In other words, the key to Buffett’s long-term success was to invest early and often.
According to the 2025 Modern Wealth Survey conducted by Charles Schwab (3), approximately 49% of Americans say they don’t invest because they don’t have enough money – assuming you need about $1,000 to get started.
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Search for small companies
Buffett said that if he started investing again today with $10,000, he would focus on small businesses.
“I would probably focus on smaller companies because I would be dealing with smaller amounts of money and it would be more likely that something would be overlooked in that area,” he said at the shareholder meeting.
In his early days, the billionaire investor focused on companies that would be considered small-caps. He purchased a small furniture company in Nebraska in 1983, when it was still expanding at the state level. Earlier, he had acquired See’s Candies for $25 million when it made only $4 million in annual profits in 1972.
As of 2019, the company generated $2 billion in pre-tax income for Berkshire Hathaway – an 8,000% return on investment (4).
These small businesses were overlooked, undervalued and had room to grow, giving Buffett an opportunity to make an early purchase.
This trend continues even today. According to an analysis by BNP Paribas (5), small-cap stocks were about 30% cheaper than large-cap stocks by the start of the last quarter of 2023. Based on a report by Royce Investment Partners (6), this valuation gap is close to a 25-year low, indicating the potential for small-cap outperformance as market conditions change.
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Buffett’s bet on See’s Candies generated an ROI of 160% per year, but even he almost passed on the acquisition, thinking it was too expensive at the time.
“I almost blew the C purchase – the seller was asking $30 million, and I was asking
Adamant on not going above $25 million. Fortunately, he relented,” Buffett wrote in Berkshire Hathaway’s 2007 annual shareholder letter (7). “Otherwise I would have backed out, and that $1.35 billion would have gone to someone else.”
circle of merit
IBM founder Thomas J. Watson Sr. once said, “I’m no genius. I’m smart in some places – but I stick around in those places,” and this is the mantra that Buffett applies when he’s investing (8).
Investing is risky, and Buffett minimizes that risk by sticking to industries he understands. Most of their portfolio focuses on either consumer goods businesses or financial services companies. This disciplined approach helps him manage risk and make confident, long-term decisions.
Ordinary investors can similarly reduce risk by staying within their means and avoiding speculation.
If you’re new to investing and your skill set is small, you may consider working with a dedicated financial advisor to expand your knowledge base.
A good advisor can help ensure that your investment strategy aligns with your personal goals and long-term financial plan.
But with more than 321,000 financial advisors in the U.S., according to the Bureau of Labor Statistics, where do you start?
with vanguardYou can connect with a personal advisor who can help assess how you’re doing so far and ensure you have the right portfolio to meet your goals on time.
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All you need to do is fill out a short questionnaire about your financial goals, and Vanguard’s advisors will help you determine a tailored plan And stick to it.
Once you’re ready, you can sit back and relax as Vanguard’s advisors manage your portfolio. Because they are trustworthy, they do not earn commission, so you can trust that the advice you are getting is unbiased.
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article source
We only rely on verified sources and reliable third-party reporting. For details, see our editorial ethics and guidelines.
CNBC (1); Forbes(2),(8); Charles Schwab (3); Business Insider (4); BNP Paribas (5); Royce Investment Partners (6)); Berkshire Hathaway (7)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.