Warren Buffett’s Advice

In the realm of investment legends, Warren Buffett reigns supreme.  With Berkshire Hathaway as his canvas, he’s painted an awe-inspiring masterpiece of wealth creation.  Picture this: from 1964 to 2022, the company has skyrocketed by an astonishing 3,787,464%!  Yes, you read that right — it’s the stuff of financial dreams!

Now, you might think someone with such a Midas touch would want their golden legacy to live on forever, right?  Well, hold onto your hats because Buffett has a curveball in store!  In a jaw-dropping announcement revealed in his 2013 letter to Berkshire shareholders, Buffett peeled back the curtain on his posthumous playbook.

“One bequest provides that cash will be delivered to a trustee for my wife’s benefit,” he penned, setting the scene.  “My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”

But why the S&P 500 index fund, you ask?  Simple — Buffett’s a firm believer that this strategy packs a punch like no other.  “I believe the trust’s long-term results from this policy will be superior to those attained by most investors,” he declared boldly.  It’s a set-it-and-forget-it approach, offering a smoother ride than the wild roller coaster of high-fee managers.

Now, if you’re scratching your head wondering what exactly an S&P 500 index fund is, fear not!  It’s like a financial superhero, mirroring the performance of the 500 biggest players in the U.S. stock market.  Think of it as your ticket to the heart of American capitalism, all wrapped up in one tidy package.

But wait, does this mean Buffett’s lost faith in Berkshire’s magic touch?  Not so fast!  At Berkshire’s 2021 shareholders meeting, he set the record straight.  “Well, no,” he chuckled, explaining that the lion’s share of his estate — a whopping 99.7% — is destined for philanthropic greatness or Uncle Sam’s coffers.

So there you have it, folks!  Even the Oracle of Omaha knows when to bet big and when to play it safe.  With Buffett’s sage advice ringing in our ears, maybe it’s time we all took a leaf out of his playbook and embraced the power of the mighty S&P 500 index fund.

Warren Buffett’s “20-Slot” Rule

Warren Buffett is considered one the best stock pickers of all time.  He’s like the Tom Brady of picking stocks!  

When Warren lectures at business schools, he says, “I could improve your ultimate financial welfare by giving you a ticket with only 20 slots in it so that you had 20 punches—representing all the investments that you got to make in a lifetime.  And once you’d punched through the card, you couldn’t make any more investments at all.”

He says, “Under those rules, you’d really think carefully about what you did and you’d be forced to load up on what you’d really thought about.  So you’d do so much better.”