Warren Buffett, the chairman of Berkshire Hathaway, has shared valuable advice on investing and building wealth. Buffett emphasizes the importance of starting early, focusing on small companies, and avoiding panic when stocks fluctuate. During a shareholders’ meeting in 1999, Buffett outlined the approach he would take if he were a recent graduate with $10,000 to invest.
He highlights the power of compound interest, comparing it to rolling a small snowball down a long hill. Buffett says, “The trick is to have a very long hill, which means either starting very young or living to be very old.”
For those with limited funds, Buffett suggests focusing on smaller companies where there is less competition from institutional investors. He notes that investing in good businesses at attractive prices is the key to multiplying wealth.
Buffett said that if he were starting with $10,000 today, he would begin by researching companies alphabetically, starting with names that begin with “A.”
Buffett also stresses the importance of long-term thinking.
Start early for long-term gains
“Some people should not own stocks at all because they just get too upset with price fluctuations.
If you’re gonna do dumb things because your stock goes down, you shouldn’t own a stock at all,” he said in 2018. He urges investors to remain patient and focus on the long-term value of their holdings. “Buy something you like, at a price you like, and then hold it for 20 years,” he advised.
Buffett warns against obsessing over daily stock price fluctuations. He compares stock ownership to real estate, saying, “If you bought a farm or an apartment house, you wouldn’t get a quote on it every day or every week.” Instead, he recommends treating stocks as long-term investments and ignoring short-term market noise. Buffett’s principles of starting early, thinking long-term, and investing in solid businesses remain guiding lights for those looking to build lasting wealth.
The key is to maintain discipline, stay informed, and remain patient through market volatility, just as Warren Buffett has done throughout his storied investing career.
