I used to think that Warren Buffett is one of the world’s wealthiest people because he is a great investor. Well, he is a great investor. But there is something else that has made him super-rich.
Look at the graph below that shows his net worth by age:
Source: GoBankingRates.com
Buffett did not become a billionaire until age 56.
In fact, he made 99% of his money after his 50th birthday!
The graph above will look familiar to anyone who understands compounding. If you look at the chart in my earlier post on the power of compounding, you will notice that the graph above looks very similar.
Things grow slowly at first. But then, thanks to compounding, they grow at a significantly fast rate.
Buffett’s skill is investing, but his secret is time.
Time is Money
Being a good investor is important, but what is more important is time. Wealth creation needs time. The saying ‘Time is Money’ is literally true. Save and invest regularly – small things add up over time and make a big impact. One thing to remember – you need patience for this approach to work:
Jeff Bezos: Your investment thesis is so simple… you are one of the richest people in the world, and it’s so simple. Why doesn’t everyone just copy you?
Warren Buffett: Because nobody wants to get rich slow!
Health is Wealth
The average life expectancy for someone born in 1930 was 60 years. If Buffet had lived till he was 60, he would have made about $4 billion in his life. Pretty good, but less than the $117 billion he has now at the age of 91. He would have not become the famous investor known all over the world. The saying ‘Health is Wealth’ is literally true. If you are healthy, you can live long and use the power of compounding to grow your wealth. Plus, being healthy also makes sure you can enjoy your wealth!!
About the Author
Mr. FINER (Financially Independent Not Early Retired) - Find me on Twitter
Salaried employee who achieved Financial Independence (FI) by frugality, sound investing… and most of all, patience.