Warren Buffett’s Journey: Power of Compounding - 90% of Warren Buffett's wealth came after he turned 65?

Warren Buffett’s Journey: Warren Buffett is widely celebrated for his investing brilliance. But one of the most critical factors that contributed to his success has very little to do with making investment decisions.

In his bestselling book, 'The Psychology of Money', Morgan Housel wrote, “His skill is investing, but his secret is time,” and that is how compounding favours the longest-term investors.

Talking in a 2022 interview with CNBC, Housel said, “99 per cent of Buffett’s net worth has been created after the age of 65. If Buffett retired at 65, you would have never heard of him.

Today, Buffett’s net worth is estimated at USD 132 billion, a significant increase from the USD 84.5 billion he was worth when Housel’s book was published in 2020. Housel pointed out that the bulk of Buffett’s fortune came later in life, including USD 84.2 billion accumulated after age 50 and USD 81.5 billion after age 65, highlighting the remarkable power of long-term compounding.

At 95 years old, billionaire investor Warren Buffett is the epitome of the power of patience, discipline, and the magic of compounding. As per the data provided by Peter Mallouk, the president and CEO of Creative Planning, a staggering 98 per cent of Warren Buffett’s current wealth has been created after he turned 65 years old.

The interest not only accumulates on the principal amount that has been invested but also on the interest that has been accrued in the previous periods.

Warren Buffett has compared this process to a snowball rolling down a hill. As the snowball moves down the hill, it accumulates more snow, and by the time it reaches the end of the hill, it has become much larger.

“The trick is to have a very long hill, which means starting very young or living to be very old,” Buffett has said.

How to use compound interest to your advantage

Everyday investors can take advantage of the power of compound interest by starting as early as possible and investing consistently — even in small amounts.

“Start early and even if it’s just small amounts, just keep doing it,” said David Rea, president of Salem Investment Counsellors in Winston-Salem, North Carolina.

Warren Buffett himself began investing at a young age, purchasing his first stock at just 11 years old. He bought three shares of Cities Service, only to watch the stock climb higher after he sold them — an early lesson in how difficult it can be to time the market and predict the best moments to buy or sell.

Warren Buffett’s wealth built over time!

According to Peter Mallouk, the “Oracle of Omaha” had a net worth of only USD 3 billion approximately 34 years ago, when he was 65 years old, as reported by Benzinga.

Since then, the net worth of Buffett has increased by approximately 5,233 per cent to USD 160 billion as of May 14. The net worth of Buffett, as per the data from the Bloomberg Billionaires Index, 2025, was USD 160 billion. These numbers clearly indicate that nearly 98 per cent of Buffett’s net worth has been created after the age of 65.

While sharing the data, Peter Mallouk also cited Warren Buffett, who has long credited the power of compounding for the growth of his fortune, according to Benzinga.

Buffett has been quoted as saying, “My life has been a product of compound interest,” emphasising his faith in steady and consistent investing.

He has made significant investments in companies like Apple Inc. American Express, Bank of America, and The Coca-Cola Company, through Berkshire Hathaway, as reported.

Is becoming a millionaire easy if you start early?

As humans, we are naturally inclined to focus on the short-term reward rather than the long-term one. This is why it is essential that you develop a vision for why you are investing in the first place, whether it is the freedom you wish to gain, the car you would like to own, or the emotional fulfilment you wish to gain from financial independence.

As Bradley Klontz, a certified financial planner and behavioural finance expert, says, it is much easier to stick to your goal when you have something in mind that you are working towards.

Next, you need to take action by automating your finances. This means setting up automatic transfers, with each paycheck, so that you are saving and investing on a regular basis without having to put in much effort.

As Warren Buffett says, those who begin early will benefit the most from the "power of time and compounding." As Klontz says, "Becoming a millionaire is actually a pretty doable goal if you begin early."

The good news is that an investment strategy does not need to be complicated. Buffett himself has recommended that individuals keep it simple with a low-cost S&P 500 index fund.