Warren Buffett once said that humans seem to have a 'perverse characteristic' that likes to 'make easy things difficult' — 3 top tips to become a millionaire the simple way

Keep it simple

During an interview at Georgetown University in 2013, Buffett described how in the early 1990s Bill Gates told him emerging computer technology “was going to change everything.” Buffett challenged this assertion, asking him if it was going to “change whether people chew gum.”

When Gates admitted that it probably wasn’t going to impact chewing gum sales, Buffett said, “Well then I’ll stick to chewing gum and you stick to computers.”

Technology companies, such as Gates’ Microsoft, have delivered tremendous returns since the early-90s. But Buffett resisted the notion that he needed to understand an emerging, complicated technology to make money. Simple consumer stocks, like chewing gum giant Wrigley’s, could be just as lucrative — and better yet, he understood the business. In 2008, Buffett deployed $6.5 billion to finance Wrigley's acquisition by food behemoth Mars.

“I don’t have to understand all kinds of businesses,” Buffett said at Georgetown. “There’s all kinds of businesses I don’t understand. But there’s thousands of opportunities there.” By focusing on simple businesses in the food, beverage and banking industries Buffett has managed to create a vast fortune.

Similarly, ordinary investors don’t need to find the next technical wonder or grasp artificial intelligence technology to make decent returns. Over the past five years, Celsius Holdings has outperformed Nvidia despite being just a simple beverage manufacturer.

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Don’t swing at every pitch

Buffett has often referenced baseball legend Ted Williams’ book, “The Science of Hitting,” while talking about his investment style. In the book, Williams explained that his batting average was significantly higher when he focused on pitches in his sweet spot.

Similarly, Buffett believes investors can perform well if they simply wait for good opportunities to show up rather than chase every trend. In other words, don’t swing at every pitch but wait for the ones you know you can hit out of the park.

A handful of mega-successful investments — such as Coca Cola, Apple, and American Express — have contributed significantly to Buffett’s wealth. Similarly, a regular investor needs only a handful of great investments during their career to offset mediocre ones.

Waiting for these attractive opportunities to present themselves organically could be an ideal strategy.

Focus on the field, not the scoreboard

“Games are won by players who focus on the playing field — not by those whose eyes are glued to the scoreboard,” Buffett wrote in his 2013 shareholder letter. In other words, investors need to focus on the game of picking good businesses and avoid the distraction of stock prices.

The stock market is notoriously fickle. During a market crash, nearly all stocks suffer losses regardless of the health of their underlying business. Apple stock lost 61% of its value during the 2008 financial crisis and 31.4% during the 2020 pandemic panic. However, the company has continued to deliver innovative products and expanding earnings despite these downturns. Investors who were focused on the business rather than the stock market would have recognized this.

Forget the market’s scoreboard and keep your eye on the ball.