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Leaving the CEO Position at Berkshire Hathaway at the End of 2025, Warren Buffett Concludes a Journey That Led the Company to Over US$ 1 Trillion in Market Value and Consolidated a Philosophy Based on Time, Compound Interest, and Early Start of Investments
When he left the CEO position at Berkshire Hathaway at the end of 2025, Warren Buffett was concluding a journey that resulted in a conglomerate valued at over US$ 1 trillion and a personal fortune of around US$ 150 billion, according to the Bloomberg Billionaires Index.
The Question Asked in 1999 and the Answer That Defined a Philosophy
Despite a career considered unattainable for most people, Buffett was frequently asked about how to build wealth. In 1999, during Berkshire’s annual meeting, he responded to a shareholder who asked how to achieve US$ 30 billion, an amount close to his net worth at the time.
The answer was direct. “Start early,” Buffett said casually before elaborating on the metaphor that would become one of his most well-known explanations about wealth creation over time.
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According to him, the process began with building a small snowball at the top of a very long hill, which started rolling down the hill early, gradually gaining volume.
Compound Interest as the Central Engine of Accumulation
Buffett explained that the basis of this metaphor lies in compound interest, a phenomenon in which the investor earns returns not only on the initial capital but also on the accumulated earnings over time.
This mechanism, often described by investment professionals as a form of “magic,” amplifies results as the time of investment increases, without requiring constant changes in strategy.
For Buffett, the “trick” to building a big snowball is to have a very long hill, which means starting to invest very young or living to a very old age.
Why Starting Early Completely Changes the Final Outcome
Elaborating on his vision, Buffett stated that if he had just graduated from college with US$ 10,000 to invest, he would repeat the same approach used at the beginning of his career.
This would involve seeking excellent but undervalued companies and holding investments for long periods, allowing the effects of time and compound interest to fully take effect.
Over the years, however, Buffett acknowledged that the average retail investor does not have the same time or ability to select individual stocks that outperform the market.
The Defense of Index Funds as a Practical Alternative
In 2021, during the annual shareholder meeting of Berkshire Hathaway, Buffett stated that for most people, the best alternative is to own an index fund of the S&P 500.
According to him, this strategy offers broad market exposure, reduces complexity, and eliminates the need for frequent decisions about buying and selling individual stocks.
Buffett made it clear that this approach would not lead someone to a fortune of US$ 150 billion starting from US$ 10,000, but he emphasized that the time factor can create significant differences in final outcomes.
Simulations Show the Impact of Time on Capital
One simulation cited by CNBC Make It illustrates this effect. A 22-year-old who invests US$ 10,000 in a portfolio with an average return of 8% per year and adds US$ 5,000 annually could accumulate over US$ 21 million by age 95.
If the same investor delayed the start by five years, the amount would drop to under US$ 15 million. A delay of 10 years would reduce the final amount to less than US$ 10 million, even maintaining the same conditions.
These examples reinforce the centrality of time as a decisive variable in wealth accumulation, a point reiterated by Buffett over decades, even with slight variations in context.
The Practical Limit of Extreme Wealth, According to Buffett
Despite the impressive numbers, Buffett described his own fortune as “incomprehensible” and relativized the significance of accumulating amounts far above a certain level.
At the same 1999 meeting, he stated that money makes very little difference after reaching a moderate level of comfort and quality of life.
Buffett added that he would exchange, without hesitation, a significant portion of his fortune for a few extra years of life or for the freedom to do whatever he wished during those years, summarizing his final view on wealth and time, even with all the success accumulated over his career.
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