TLDR
- Buffett said if he had $10,000 today, he’d research companies one by one, starting with the letter A
- He and Charlie Munger credited time and compounding as their biggest investing advantages
- Munger said getting to the first $100,000 is the hardest part for most people
- Buffett’s core advice: buy good businesses at fair prices and think for yourself
- The “snowball” metaphor captures Buffett’s belief that small, consistent actions compound into large results over time
Warren Buffett has been asked many times how he built his fortune. At Berkshire Hathaway’s 1999 shareholder meeting, he gave one of his most direct answers.
An investor asked Buffett what he would do if he were starting over in his early 30s with the goal of making $30 billion. The crowd laughed. Buffett’s first answer was simple: “Start young.”
He wasn’t joking.
The Power of Compound Interest
Buffett said his biggest advantage was never a secret formula. It was time.
He described wealth-building as rolling a snowball down a hill. The longer the hill, the bigger the snowball gets. “The trick is to have a very long hill, which means either starting very young or living to be very old,” he said.
This idea comes from Buffett’s biography, The Snowball, by Alice Schroeder. The title comes from a scene where a nine-year-old Buffett rolled snowballs across his Nebraska lawn, watching them grow as they picked up more snow.
Buffett bought his first stock at age 11. He paid $38.25 per share, watched it drop, then sold when it recovered slightly. It later climbed past $200. He called it an early lesson in patience.
What Buffett Would Do With $10,000 Today
When asked directly, Buffett said he would not change his approach.
“If I were getting out of school today and I had $10,000 to invest, I’d start with the As,” he said. He meant he would go through companies alphabetically and research them one by one.
He said he would focus on smaller companies. In his view, smaller firms are more likely to be overlooked, which means better chances of finding undervalued opportunities.
His core advice remains unchanged: “You have to buy businesses… at attractive prices, and you have to buy into good businesses. And that advice will be the same a hundred years from now.”
Buffett also pointed to his discovery of insurer Geico in 1951. Investment firms told him he didn’t know what he was talking about. He invested anyway. The lesson: “You have to think for yourself.”
The First $100,000 Is the Hardest
Charlie Munger added a practical note to the exchange. He said the hardest part for most people is reaching that first $100,000.
Adjusted for inflation, that is roughly $200,000 today.
Munger said the people who get there fastest tend to share three traits: they are rational, they are opportunistic, and they consistently spend less than they earn.
Once that base is built, compounding starts doing more of the work.
In Berkshire’s 2024 shareholder letter, Buffett noted the company paid $26.8 billion in federal income taxes that year, more than any U.S. company in history. It all started with reinvested earnings and time.
Buffett’s message has not changed in decades. Start now. Buy quality. Think independently. Be patient.
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