- ORIGINAL NEWS
Most of Warren Buffett’s wealth was accumulated after age 65. Here’s what that can teach individual investors
- SUMMARY
Warren Buffett’s remarkable success in investing is attributed largely to his unwavering commitment to staying invested over a prolonged period of time.
Unlike many investors who retire comfortably at 65, Buffett continued to invest diligently well into his later years.
This long-term approach allowed him to harness the power of compound interest, where the earnings accumulated not only on the initial investment but also on the accumulated interest from previous periods.
Buffett’s decision to begin investing at a young age played a pivotal role in his wealth accumulation.
He made his first stock purchase at the age of 11.
This early start provided him with the advantage of more time for his investments to grow through compounding interest.
By the time he reached 65, a mere 1% of his total wealth had been accumulated.
The vast majority came in his later years, with more than $80 billion acquired after turning 50.
Individual investors can emulate Buffett’s approach by investing early, even in small amounts, and maintaining consistency.
It is crucial to avoid panic selling during market downturns and instead focus on long-term goals.
Disciplined and automated investment strategies, such as regular contributions to a low-cost S&P 500 index fund, can help individuals achieve financial success similar to Buffett.
This strategy has been advocated by Buffett himself, who believes that investing in a diversified portfolio of American companies through index funds offers a simple and effective method for long-term wealth accumulation.
- NEWS SENTIMENT CHECK
- Overall sentiment:
positive
Positive
“Buffett himself got an early start, making his first stock purchase at age 11.”
“But after selling the three shares of Cities Service, he saw the stock surge, which served as an early lesson that it’s hard to predict when to buy a stock and when to sell it.”
Negative
“People tend to get excited when the market is going up, which prompts them to buy, noted Bradley Klontz, a certified financial planner and behavioral finance expert with Your Mental Wealth Advisors.”
“Then when markets drop, they tend to get scared and sell, which is the opposite of what they should be doing, said Klontz, who is also a member of the CNBC FA Council.”