Warren Buffett retired with a $150B fortune. The ‘magic trick’ he credits for it is something anyone can learn. Here’s how you can take advantage

Instead, he has repeatedly pointed to something far more ordinary, and something most people overlook.

“The nature of compound interest is that it behaves like a snowball of sticky snow,” Buffett told shareholders at the company’s annual meeting back in 1999, quoting his vice-chairman Charlie Munger. “And the trick is to have a very long hill, which means either starting very young or living to be very old” (1).

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

The real driver of Buffett’s $150B fortune

Compounding isn’t just earning returns on your money. It’s earning returns on your returns. The earlier you start, the longer your “hill” and the more wealth your snowball eventually amasses.

Buffett has emphasized this point across decades of Berkshire Hathaway shareholder letters, often writing that the most significant catalyst for his wealth was not brilliance, but time — specifically, starting as a child and continuing uninterrupted into his 90s.

About 95% of Buffet’s personal wealth accumulated after he was 65, according to an August 2025 analysis in Barron’s, as reported by Entrepreneur (2). Even the most famous value investor of his generation built his fortune slowly.

Why ‘start early’ matters more than ‘start big.’

Buffett has consistently argued that the average person doesn’t need individual stocks — or the Oracle of Omaha’s legendary skill — to benefit from compounding.

At the 2021 Berkshire annual meeting , Buffett said that for most people, the best thing to do is to own the S&P 500 index fund (3).

That advice is grounded in the long-term track record of the U.S. stock market. The U.S. stock market has historically produced average annual returns of roughly 10% over the long-term — even amid recessions, crashes and corrections.

The timing of when you start matters a great deal. Consider this example:

A 22-year-old investing $10,000, adding $5,000 each year at an 8% return, could end up with about $20 million by age 95 (4). Start just five years later, and the total drops to less than $14 million. Wait until age 32, and the final value will be less than $6 million.

The earlier you start, the more the math works in your favour. Even the best stock picker in the world can’t replicate decades of compounding if they wait too long to begin.

Why many Americans still hesitate to invest

Despite Buffett’s straightforward approach, millions delay investing because:

• They feel they don’t earn enough
• The market seems too risky
• They believe they’ve “missed their chance.”
• They expect to become better investors later

Buffett has long warned that these assumptions lead to worse outcomes than simply starting small and being consistent. He has also cautioned against panic selling, chasing trends, or trying to time the market, all of which can interfere with the compound-interest magic.

His point: You don’t need luck, special access or professional training. You need time and patience.

You don’t need $150B to benefit from Buffett’s trick

For everyday Americans, the takeaway isn’t to copy Buffett’s stock picks or his career. It’s to imitate the part that’s available to everyone: Start early, be consistent (perhaps even automating deposits!) and let compounding do the heavy lifting.