Most people will point to Warren Buffett’s spectacular track record as a thing that sets him apart. And it’s certainly impressive. His results show what great returns and a long runway can accomplish. Of course, only one of those things is easily copied.
Everyone is drawn to Buffett’s returns but the biggest lesson is the advantage of investing early in life. Buffett made his first investment at the age of 11. That started a 78 year (and counting) long experiment for compounding to work its magic.
No special skills or knowledge are required with compounding. It’s the one thing everyone can take advantage of with a little bit of money and time and patience. Patience is key. It also, likely, causes the most trouble.
Buffett seemed almost destined to build an empire. He had a business mindset at an early age. He hustled gum and Coca-Cola bottles door to door, bought a 40-acre farm, and built a pinball machine business before he went off to college.
Buffett’s investment track record officially began in 1956 with the Buffett Partnership. He ran it until 1968, producing a 32% annual return (25% for his limited partners). But before he closed up shop, he bought shares in a declining textile company known as Berkshire Hathaway. It was trading below its net current asset value. Continue Reading…