How Warren Buffett Makes So Much Money

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Warren Buffet is one of the richest people on Earth (currently the 3rd) with his net worth of $73 billion. He has made a tremendous amount of money in his life. How much do you earn per year? How much do you work for your income? Do you like what you do? If you are not happy with your job and income, here is a simple way you can change this in your favor. I will show you how the greatest investor of our time makes billions of dollars every single year. After you read the following lines, you will be just amazed how simple things are. Do you know that what Buffett does can be done actually by everyone? Not everyone will do it, this is the major difference. So here is what he did to earn $73 billion… First of all he started early. Buffett began investing when he was just 19. Second, he bought value and held it permanently. According to him, the best time to sell a good stock is… never. Third but not the least, he was bloody patient (this is probably the hardest thing to do). This is all uncle Warren does. In a few words, he takes a huge advantage of compound interest. He buys good companies providing a good return and holds their shares forever. Here is an example. One of his most lucrative purchases was the shares of the Coca Cola Company, which he bought in the stat of his investment career, and today they are one of the biggest holdings of his fund – Berkshire Hathaway. These shares have yielded 18% return on investment for the

A picture by Mark Hirschey on

Warren Buffett – A picture by Mark Hirschey

last 30 years. This is a pretty nice return, if you invested just $ 2 000 in the company before 30 years, you would have made 280 000 till today. And the greatest thing here is that everyone would have achieved this result, if she just bought shares of Coca Cola and held them. We can not take the time back someone would say… Here I will cite a great Chinese quote: “The best time to start investing was 20 years ago, the second best time is today!“. Actually Buffett was not the one, who discovered Coca Cola. Actually he invested quite late in the company, this is why he earned just around 14 000% return on his investment. He could have made many times more, if he invested in the company when he was just 19. Here is an interesting fact. Imagine that you had $40 dollars and bought Cola shares with them in 1919. How much do you think you would have today? We are talking about just $40 here and a period of 96 years. So what do you think? $40 000..? $400 000? $1 000 000? All of these answers are wrong. If you invested $40 in the company before 96 years, today you would have earned $5 000 000! Yes, I didn’t press the zero button to many times, just enough to demonstrate you the power of investing. The number is right, we are talking about five million out of just 40 bucks. Nearly crazy income!

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