"People don’t want to get rich slowly, so they choose to get poor quickly." (Warren Buffett)

"People don’t want to get rich slowly,

so they choose to get poor quickly."

(Warren Buffett)

This is a quote I like a lot, though it might be less well-known than other Buffett quotes. It’s not entirely clear if Warren Buffett actually said this entire sentence. Let me provide a bit of background. It’s said that Jeff Bezos, the founder of Amazon, asked Warren Buffett during a meeting: "You’re the second richest person in the world, and yet your investment philosophy is quite simple. Why doesn’t everyone follow your investment strategy?"

Warren Buffett reportedly responded to Jeff Bezos, “People don't want to get rich slowly” or some version of that. While it's unclear if he added, “so they choose to get poor quickly,” combining these two phrases captures the essence of his message: many people prioritize quick gains over long-term, sustainable wealth, which can sometimes lead to significant financial losses.

Warren Buffett’s average annual return is around 20%. As the second richest person in the world and a highly respected investor, that might not seem extraordinarily impressive, right? Buffett, born in 1930, began investing at the age of 11 and recently turned 94. Imagine if he started with an initial investment of $1 at age 11. With a 20% annual return over 83 years, his investment would have grown to $3.7 million by age 94. Of course, Buffett started with more than $1 and received additional investments from outside sources along the way. Consequently, his company, Berkshire Hathaway, became the first non-tech company to exceed a market value of $1 trillion on August 28, 2024.

Combining a 20% annual return with a long period of time results in unbelievable growth due to the magic of compounding. Buffett reportedly earned over 99% of his wealth after the age of 50. However, many individual investors, dissatisfied with a 20% return, prefer high-risk investments such as ultra-short-term momentum plays, 3x leverage on volatile stocks or ETFs, or unproven purely speculative altcoins. Trying to get rich quickly often leads to getting poor just as fast.

Of course, achieving an average annual return of 20% over several decades, like Buffett, is nearly impossible for most investors. But we don’t necessarily want to become as wealthy as Buffett, do we? For instance, the S&P 500 has historically provided an average annual return of around 10%. If we assume this average return continues and invest in an S&P 500 ETF for 30 years, the principal would grow 17.4 times. Investing $57.3k would grow to $1 million. If you don’t have $57.3k, you can start with a smaller amount and extend the investment horizon. For most people, this should be sufficient. So, let’s not rush but get rich slowly

As you may have noticed, this is where I got the idea for my blog name, “Grow Rich Slowly.” I want every one of my readers to grow rich slowly but surely.

Thanks for reading. Wish you grow rich slowly and surely!

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