Sunday, July 18, 2021

Compound interest and Warren Buffett

 Warren Buffett's wealth has grown from $20K when he was 21 years old to over $100B today at the age of 90.[1] His wealth wasn't made from a single trade that turned him into a billionaire, but by growing steadily through compounding over 70 years. Anyone who wants to become as wealthy as Buffett can compare their net worth to his at some time in his life. By investing in stocks, they can grow their wealth similarly, but will require buying stocks with significant returns over years. Buffett's fortune wasn't created by some miracle that only happened to him, he just successfully picked stocks and held them over a long time period. He didn't retire at 60 and quit investing. His investments continued to compound for another 30 years after that date. Interestingly, he has publicly broadcast his investing philosophy at yearly shareholder meetings and through several biographies. In 2019, Charlie Munger mentioned Warren Buffett has also continued learning through out his life to continue this streak.[2]


1. https://www.marketwatch.com/story/from-6000-to-67-billion-warren-buffetts-wealth-through-the-ages-2015-08-17

2. https://youtu.be/YS7j0YrlceE

Winning bet on stocks

 The S&P 500 index ETF is one of the safest bets in stock investing, and over time has an increasing likelihood of making money. However...