• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

The simple “trick” for retirement savings

There’s a reason that the word trick is in quotations: It’s hardly a trick — more of a different way of thinking.

In the CNBC interview, Buffett advised savers to buy shares of the S&P 500, and keep doing it no matter what. That’s the key not only to holding a strong retirement fund but also to having more cash on hand to pass down to your family, he said.

“Keep buying it through thick and thin,” he said. “Especially through thin.”

Buffett explained that it can be incredibly tempting to sell when the market sells and to buy when the market buys. But doing so means not getting the best deal for your dollar.

“When you see bad headlines in newspapers, we say, ‘Well maybe I should skip a year.’ Just keep buying it,” he said.

If you’re buying the S&P 500, you’re buying the biggest and best companies in the country. So you just have to remain confident, like Buffett, that these companies will rise again.

“American business is going to do fine over time, so you know the investment universe is going to do very well.”

Trading Tips for All Levels: Avoid These 5 Expensive Mistakes

Don't let costly errors derail your trading success. Learn about the five most expensive mistakes in options trading and how to avoid them, whether you're just starting out or have years of experience. Enhance your trading strategy today and stay ahead of the game!

Learn More

A proven formula

Buffett’s track record shows he knows a thing or two about growing wealth. Since he bought his first stock in 1941, his net worth has ballooned from $5,000 (about $108,000 in today’s dollars, according to Official Data Foundation) to more than $110 billion today, according to Bloomberg.

But the success has been due to much more than buying growth stocks, he said.

“The trick isn’t to pick the right company. Most people aren’t equipped to do that and plenty of times I make mistakes on that,” he told CNBC. “The trick is to essentially buy all the big companies through the S&P 500. And to do it consistently, and do it in a very, very low-cost way. Because costs really matter in investments.”

When you’re investing for the future, Buffett advises, look at the fine print. It can seem pretty great if you’re beating out inflation with returns of 7% or more, but management fees can severely eat away at your retirement savings, Buffett said.

“If returns are going to be 7% or 8%, and you are paying 1% for fees, that makes an enormous difference in how much money you’ll have by retirement,” he said.

Even half as much in fees can add up. For instance, an annual fee of just 0.50% will eat $500 out of a $100,000 investment principal every year. That’s $10,000 in fees over 20 years, just on the principal, to say nothing of how much will be eaten out of your investment gains over time.

It’s true that, in many cases, fees are inevitable: even low-cost S&P 500 index funds charge fees. So do your research and you can come up with a list of the cheapest options.Then, as Buffett states, keep contributing for decades and you’ll have plenty by retirement.

“I think it’s the thing that makes sense practically all the time,” Buffett said on CNBC.


This 2 Minute Move Could Knock $500/Year off Your Car Insurance in 2024

Saving money on car insurance with BestMoney is a simple way to reduce your expenses. You’ll often get the same, or even better, insurance for less than what you’re paying right now.

There’s no reason not to at least try this free service. Check out BestMoney today, and take a turn in the right direction.

Amy Legate-Wolfe Freelance contributor

Amy Legate-Wolfe is an experienced personal finance writer and journalist. She has a Bachelor of Arts in History from the University of Toronto, a Freelance Writing Certificate in Journalism from the University of Toronto Schools, and a Master of Arts in Journalism from Western University. Amy has worked for Huffington Post, CTVNews.ca, CBC, Motley Fool Canada, and Financial Post. She is skilled at analyzing trends and creating content for digital and print platforms. In her free time, Amy enjoys reading and watching British dramas on BritBox. She is a mother and dog-mom to a Wheaten Terrier.


The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter.