Many of us think that to achieve any big goal, no matter what it is, we need to take big actions and make considerable progress.
Otherwise, how is it possible to attain the wealth of men like Warren Buffett or Jeff Bezos valued at billions of dollars?
Based on this premise we think that we need big hits repeatedly to achieve it. However, the results tell us another story.
What nobody tells you about how to achieve wealth or great results:
It’s all too easy to be tempted to think that Warren Buffett’s wealth is the result of a few wise investment decisions that landed him on the list of the richest men on the planet.
In addition, the fact of being cataloged as the best investor of all time (which he is), leads us to think that no one else can achieve what he did, nor make his investment decisions or have that mental and financial clarity to accumulate so many billions of dollars.
However, reality shows us the opposite. We have to change the way we look for these great results and change our perspective by including an indispensable variable in this formula.
As stated by Morgan Housel in his book Psychology of Money, massive success is not the product of a great result or success that cannot be replicated, but rather the sum of small victories accumulated over time.
The small victories that led Buffett to accumulate billions of dollars
In the case of Warren Buffett, this famous investor accumulated more than 95% of his fortune after turning 65 years old. In fact, it is said that 99% of his fortune only came after he turned 50.
What is this about? Although Warren Buffett is an excellent investor, cataloged by many as the best investor of all time, his advantage and difference lie in the variable that few of us take into consideration:
The time you spend investing.
In that way? The key to Buffett’s financial success and his $85 billion is not just due to his good investment decisions, but how long he’s been doing it.
According to his story, told in more than 2,000 books that talk about Buffett’s life, he began investing when he was just 10 years old. That is, Buffett has been investing for more than 75 years. There is the key.
How much does time influence your personal wealth?
As you just read, Warren started investing his money when he was just 10 years old. If his beginnings had been later, his wealth would be totally different.
I’ll give you an example, if Buffett had spent the first years of his life discovering his life purpose or what he was passionate about, or was dedicated to traveling and spending money during his 20s, his results would be very different.
Based on this, suppose that Buffett had started investing in his 30s, with the same ability and intelligence to obtain the same financial return (22% per year on average), and decided to retire at 60 to enjoy his retirement.
Do you know how much Warren Buffett’s net worth would be if he had made this decision?
A little over 9 million dollars. Quite different from his current wealth measured in billions.
There is no doubt that Warren Buffett is an excellent investor, and his returns are amazing. However, as Morgan Housel suggests, the key to his success that the vast majority of us do not have in mind is time.
It’s 75 years of making small, good, constant, bad, and profitable decisions over time.
What can we learn and apply from all this?
Many of us think that in order to build great fortunes, achieve financial freedom or create a successful company, we have to make few, and very correct, decisions. We look for tricks, shortcuts, and fast routes to a destination that takes time.
And while there are exceptions to the rule of people who achieve results in the short term, if we really want to build amazing results, let’s learn from the patience of Warren Buffett and his ability to stay in the market.
To close this article I would like to invite you: Build a long-term mindset. In the short term, we find linear growth, while in the long term we can reach exponential goals that we hardly believe are achievable.
