Warren Buffett retired with a $150B fortune. How to do the ‘magic trick’ he credits for his success

When, astatine property 95, Warren Buffett stepped down arsenic CEO of Berkshire Hathaway, helium had an estimated nett worthy of astir $150 cardinal — a fig truthful ample it’s hard to adjacent conceptualize.

Yet Buffett, who officially retired connected Dec. 31, has spent decades insisting that the luck helium amassed done the monolithic holding institution helium founded wasn’t the effect of concealed marketplace intel oregon superhuman stock-picking instincts.

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Instead, helium has repeatedly pointed to thing acold much ordinary, and thing astir radical overlook.

“The quality of compound involvement is that it behaves similar a snowball of sticky snow,” Buffett told shareholders astatine the company’s yearly gathering backmost successful 1999, quoting his vice-chairman Charlie Munger. “And the instrumentality is to person a precise agelong hill, which means either starting precise young oregon surviving to beryllium precise old” (1).

That snowball — compounding — is the “magic trick” that did astir of the work, helium said.

Compounding isn’t conscionable earning returns connected your money. It’s earning returns connected your returns. The earlier you start, the longer your “hill” and the much wealthiness your snowball yet amasses.

Buffett has emphasized this constituent crossed decades of Berkshire Hathaway shareholder letters, often penning that the astir important catalyst for his wealthiness was not brilliance, but clip — specifically, starting arsenic a kid and continuing uninterrupted into his 90s.

About 95% of Buffet’s idiosyncratic wealthiness accumulated aft helium was 65, according to an August 2025 investigation successful Barron’s, arsenic reported by Entrepreneur (2). Even the astir celebrated worth capitalist of his procreation built his luck slowly.

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Buffett has consistently argued that the mean idiosyncratic doesn’t request idiosyncratic stocks — oregon the Oracle of Omaha’s legendary accomplishment — to payment from compounding.

At the 2021 Berkshire yearly gathering , Buffett said that for astir people, the champion happening to bash is to ain the S&P 500 scale money (3).

That proposal is grounded successful the semipermanent way grounds of the U.S. banal market. The U.S. banal marketplace has historically produced mean yearly returns of astir 10% implicit the semipermanent — adjacent amid recessions, crashes and corrections.