Good morning and happy Monday!
“The biggest thing about making money is time. You don’t have to be particularly smart, you just have to be patient”
– Warren Buffett
I recently came across a brief interview with Warren Buffett where he was asked to comment on the earning call for Apple (I think it’s from 2018). His response was absolutely excellent!
Please spend 90 seconds watching this video: https://x.com/i/status/1894751837976137795
(Please hover over the video and click on the volume button on the bottom of the video frame to make sure you can hear the sound … if this symbol is showing the volume is muted, you want it to show this symbol
and make sure your computer volume is on.)
Here is a guy who is a legend in the investment space and has made billions of dollars and he basically says in this interview (my paraphrase): “Who cares what happens to a stock in the next day, week, month or even year … I own the stock because the company is profitable, and I believe in their business model.”
I think maybe he’s been reading my Monday Morning Memos. 😉 LOL!!!
Warren Buffett was born August 30, 1930, so he will turn 95 this summer.
Buffet is a fascinating guy, but what I’ve found particularly fascinating is how he accumulated his wealth.
Check this out: over 99% of his net worth he accumulated after turning 65!
“If Buffett had retired at age 65, you would have never heard of him,” author Morgan Housel points out.
At age 21 Buffett’s net worth was $20,000. He became a millionaire at age 30. He became a billionaire at age 56. Today his net worth is estimated to be right around $150 billion. That’s $150,000,000,000 if you want to see it written out 😊.
Methodical, steady growth is what built Warren Buffet’s wealth. That same formula can work for all of us as well.
Compounding interest is my favorite financial topic!
Albert Einstein once said, “Compound interest is the greatest invention the world has ever produced.” Einstein also said, “Compound interest is the eighth wonder of the world.”
So, if Albert Einstein, Warren Buffett, and Jonathan Hunt (like how I threw my name in there 😉) are all saying the same thing, maybe it’s worth checking out! 😊
A real quick example:
$1,000 invested at an 8% compounding growth rate (just math, no product or recommendation)
- After 10 years is worth $2,219.64
- After 20 years is worth $4,926.80
- After 30 years is worth $10,935.73
- After 40 years is worth $24,273.39
- After 50 years is worth $53,878.18
- After 60 years is worth $119,590.18
- After 70 years is worth $265,447.18
- After 80 years is worth $589,197.25
- After 90 years is worth $1,307,805.91
- After 100 years is worth $2,902,858.62
Look at that growth in the later years! Look how slow that growth is in the early years.
The only way to allow compound interest to work its magic is to give it time.
My friends, at times like this I think warrants yet another reminder: be patient, stay focused, tune out the noise, work the plan. As Warren Buffett says in the video clip shared above, “Nobody buys a farm based on whether they think it’s going to rain next year.”
I’m so honored to help you incorporate this wisdom and these principles into your financial plan. Please let us know any way we can come alongside to support you.
Make it a great week ahead!