In the world of investing, you will probably find only a handful of people who have managed to achieve ‘legend’ status. Warren Buffett is one of them. 94-year-old Buffett, who now has a personal fortune of over $140 billion, transformed investing into an art and discipline. His ideas – which he has shared over the years through his speeches, letters to shareholders and interviews – still shape the investing direction for millions globally.
But the question is, can Buffett’s investing style work for people who have very little money to start with?
The answer is — yes, provided you are willing to adopt patience, discipline and long-term thinking.
Even though the ‘Sage of Omaha‘ has a massive fortune today, he too started investing with a small amount in the beginning. At the age of 11, he made his first stock purchase — three shares of Cities Service Preferred in 1942, priced at $38 per share.
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Buffett, the Chairman and CEO of Berkshire Hathaway, has often said that his best time as an investor was when he was just starting out with a small amount of money. He says this allowed him to take more risks and invest in smaller companies that had greater growth potential.
“If you are working with a small sum of money… and are willing to do the work, there is no question that you will find some things that promise very large returns compared to what we will be able to deliver with large sums of money,” the billionaire investor said in one of his speeches.
Time and again, interviewers or audience members have asked Buffett what advice he would give to someone starting out his investment journey with a small amount.
More often than not, his answer includes these points:
Don’t be afraid to start small — whether it’s $100 or $500, if you invest in the right place and time is on your side, this amount can turn into millions in the future.
Low-cost index funds — Buffett believes that index funds are the easiest and safest way for beginner investors,
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