Nati Harnik/AP
That was exactly the answer Warren Buffett gave in 1999 at a Berkshire Hathaway shareholders’ meeting. One of the investors asked him how to replicate his success and make $30 billion.
“Start young,” Buffett replied. And he wasn’t joking.
Buffett explained that the main advantage of his generation of investors wasn’t secret strategies, but time.
“My partner Charlie Munger always said: we started rolling this little snowball at the top of a very long hill,” he said. “The nature of compound interest is such that it behaves like a ball of sticky snow. An investor’s task is to find the longest slope: you either have to start very young or live a very long time.”
If he were starting today with $10,000, Buffett wouldn’t look for complicated schemes. “I’d start with the letter ‘A’—that is, I’d study companies one by one. “I’d probably focus on small businesses: the stakes are lower, and there’s a better chance that the market has overlooked something there.”
Buffett acknowledged that investing is more difficult now than it was in the 1950s, when profitable deals were obvious. Today, the problem is different—an information overload. But the philosophy hasn’t changed:
“You need to buy good companies or stakes in them—that is, stocks at a reasonable price. And this advice will still be relevant 100 years from now,” he noted.
Buffett also recalled how, in 1951, he discovered the insurance company Geico, even though many people at the time didn’t take his idea seriously.
“They claimed I didn’t know what I was talking about,” he said. That experience, he said, taught him to think for himself and look for opportunities where others don’t see them.
Berkshire co-founder Charlie Munger added a harsher observation: for most people, the hardest part is raising the initial capital.
According to him, raising the first $100,000 (which, adjusted for inflation, is about $200,000 today) is the hardest part of the journey. After that, compound interest starts working much more effectively, and capital begins to grow faster.
The bottom line of their approach is simple: don’t look for quick fixes. Start as early as possible, invest in businesses you understand, think for yourself, and let time do the heavy lifting.
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