Berkshire Hathaway CEO and self-made billionaire Warren Buffett turned 90 on Sunday, August 30. And he’s not slowing down.
In honor of the Oracle of Omaha’s big day, CNBC Make It rounded up six of his best pieces of investing — and life — advice.
1. Think long-term
If you’re planning to invest in individual stocks, don’t base your choice on which companies are performing well right now. Instead, consider which businesses have staying power.
“Nobody buys a farm based on whether they think it’s going to rain next year,” Buffett told CNBC’s “Squawk Box” in 2018. “They buy it because they think it’s a good investment over 10 or 20 years.”
Buffett decides a business is worth investing in based on if he believes it will last. He purchased See’s Candies with longtime business partner Charlie Munger in 1972 and spent more than $1 billion on Coca-Cola stock in 1988 — both of which turned out to be good bets and both of which he still owns today.
“Put together a portfolio of companies whose aggregate earnings march upward over the years, and so also will the portfolio’s market value,” Buffett wrote in his 1996 letter to shareholders. “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”
2. Stay the course
It can be stressful when the markets tank, but don’t panic and sell off your investments just because of the latest news cycle. The markets are always going to be volatile, and the best thing any investor can do, regardless of experience, is keep a level head, Buffett says.
“Though markets are generally rational, they occasionally do crazy things,” he wrote in his 2018 letter to shareholders.
Instead, stay the course and trust that you’ve invested in companies that will stand the test of time. Investors need “an ability to both disregard mob fears or enthusiasms and to focus on a few simple fundamentals,” Buffett wrote. “A willingness to look unimaginative for a sustained period — or even to look foolish — is also essential.”
Put simply: “Don’t watch the market closely,” as Buffett told CNBC in 2016 amid wild market fluctuations.
3. Marry the right person
Buffett made his fortune through smart investing, but the most important decision he ever made has nothing to do with money. The biggest decision of your life, Buffett says, is who you choose to marry.
“You want to associate with people who are the kind of person you’d like to be. You’ll move in that direction,” he said during a 2017 conversation with Bill Gates. “And the most important person by far in that respect is your spouse. I can’t overemphasize how important that is.”
You want to associate with people who are the kind of person you’d like to be.
Buffett married his longtime friend Astrid Menks in 2006, after his first wife of nearly three decades, Susan Buffett, passed away in 2004.
It’s advice he’s been giving for years. As he said at the 2009 Berkshire Hathaway annual meeting: “Marry the right person. I’m serious about that. It will make more difference in your life. It will change your aspirations, all kinds of things.”
4. Buy index funds
When it comes to investing, there are no guarantees. But Buffett has emphasized time and again that putting your money into index funds is a reliable way to take advantage of market gains while hedging against risk.
Specifically, Buffett recommends them as a way to boost retirement savings. “Consistently buy an S&P 500 low-cost index fund,” he told CNBC’s On The Money in 2017. “I think it’s the thing that makes the most sense practically all of the time.”
Index funds make sense for two reasons: They’re inexpensive and aren’t tied to the success of one single entity.
“The trick is not to pick the right company,” Buffett says. “The trick is to essentially buy all the big companies through the S&P 500 and to do it consistently.”
5. Invest in yourself
Next, take care of your body and mind — especially when you’re young. “If I gave you a car, and it’d be the only car you get the rest of your life, you would take care of it like you can’t believe. Any scratch, you’d fix that moment, you’d read the owner’s manual, you’d keep a garage and do all these things,” he said.
“You get exactly one mind and one body in this world, and you can’t start taking care of it when you’re 50. By that time, you’ll rust it out if you haven’t done anything.”
6. Remember that money isn’t everything
“Being given unconditional love is the greatest benefit you can ever get,” Buffett told MBA students in a 2008 talk.
“The incredible thing about love is that you can’t get rid of it. If you try to give it away, you end up with twice as much, but if you try to hold onto it, it disappears. It is an extraordinary situation, where the people who just absolutely push it out, get it back tenfold.”