Warren Buffett is hailed as one of the greatest investors of all time, but according to author Morgan Housel, his true edge isn’t just picking the right stocks — it’s letting time work its magic. In The Psychology of Money, Housel notes that 99% of Buffett’s net worth came after he turned 65. “If Buffett retired at age 65, you would have never heard of him,” Housel said in a CNBC interview.
Today, Buffett’s fortune stands at roughly $132 billion — up from $84.5 billion in 2020. Most of it was built in his later years, thanks to compound interest: earning returns not only on the original investment but on past gains as well. Buffett likens it to a snowball rolling downhill — the longer the hill, the bigger the snowball.
The takeaway for everyday investors? Start early and stay consistent. Even small, regular contributions to an investment account can grow into substantial wealth over decades. David Rea of Salem Investment Counselors advises setting up automatic transfers from your paycheck into a retirement plan and resisting the urge to time the market.
Behavioral finance expert Bradley Klontz warns that fear and excitement often lead investors to buy high and sell low — the opposite of what works. Over the past century, the S&P 500 has returned over 10% annually on average, but you only benefit fully by staying invested through market ups and downs.
Klontz adds that it’s “pretty easy to become a millionaire” if you start early — as little as $5 a day in your twenties could grow to $1 million over time. Wait until 30, and you might need $500 a month.
Buffett’s own advice? Keep it simple — a low-cost S&P 500 index fund, bought regularly, can build lasting wealth if you let time do the heavy lifting.
