Warren Buffett retired with US$150B last year — here’s the simple wealth magic “trick” he once said does the heavy lifting

When Warren Buffett stepped aside as CEO of Berkshire Hathaway in late 2025, he did so with an estimated net worth of roughly US$150 billion (C$208 billion)— a sum so massive that even many Canadians struggle to put it into perspective. Yet Buffett insisted he didn't accumulate wealth through secret algorithms, special access or elite stock-picking instincts.

Instead, he points to something surprisingly ordinary — something Canadians can use no matter their income level. That's compound interest, something he describes as his "magic trick" to accumulating wealth.

“We started building this little snowball on top of a very long hill,” the Oracle of Omaha told shareholders in 1999. “The nature of compound interest is that it behaves like a snowball.”

The real driver of Buffett’s US$150B fortune

CNBC notes how (1) compounding isn’t just earning returns on your money — it’s earning returns on your previous returns, creating exponential growth as time goes on.

Buffett has emphasized this repeatedly in Berkshire Hathaway shareholder letters, writing that the most powerful force behind his fortune wasn’t brilliance, but time — specifically, starting as a child and compounding into his 90s.

Analysis suggests that 98% of Buffett’s net worth (2) was accumulated after age 65. Even the world’s most famous value investor built his fortune gradually, not instantly.

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Why starting early matters more than starting big

Buffett has repeatedly said the average person doesn’t need to pick stocks to benefit from compounding.

At the 2021 Berkshire annual meeting (3), he said, “For most people, the best thing to do is to own the S&P 500 index fund.”

And there's good reason to consider Buffett's advice. The stock market has historically produced average returns close to 10% annually (4), despite recessions and volatility.

Although it's important to note that the timing of when you start matters profoundly. Consider Buffett’s favourite example:

• A 22-year-old investing $10,000, adding $5,000 each year at an 8% return, could end up with nearly $20 million by age 95.
• Start just five years later, and the total drops to about $13.5 million.
• Wait 10 years, and the final value will fall below $10 million.

No change in income, only time.

Why many Canadians still hesitate to invest

A 2023 survey from the Investment Funds Institute of Canada found (5) 38% of young adults are not aware of their investing options. In addition, nearly half (44%) say they don't have enough money to invest.

However, Buffett has long warned that waiting for the “perfect time” can be far more expensive than starting small and staying committed.

He also cautions against panic selling during downturns which break the compounding cycle.

His message is simple: you don’t need luck, secrets or expertise — you need time and consistency.

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You don’t need much to benefit from Buffett’s trick

For everyday Canadians, the takeaway isn’t to mimic Buffett’s stock picks or his career. It’s to copy the part that’s available to everyone: Start early, automate consistently and let compounding do the heavy lifting.

Here are some Canadians accounts that can help you get started:

• RRSPs allow for tax-deferred growth (6)
• TFSAs allow investment gains to grow tax-free
• Workplace pension plans and group RRSPs often include employer matching (7), which is free money that many Canadians still leave on the table

When looking to investing in the stock market a la the Oracle of Omaha, low-cost index funds and ETFs align with his recommendations for non-professional investors. This is for three reasons:

• Diversification: They give you exposure to a wide range of securities, so you’re not putting all your eggs in one basket (or relying on just one stock or bond to perform).
• Professional management: Whether it’s a seasoned pro or an algorithm calling the shots, these funds handle the heavy lifting when it comes to research and decision-making.
• Accessibility: Beginner-friendly and easy to access through most major brokerages, making it simple for anyone to get started.

Despite making one of the most enormous fortunes in history, Buffett has repeatedly said money isn’t the end goal.

“The money makes very little difference after a moderate level,” he told shareholders. “If you asked me to trade away a percentage of my net worth for extra years of my life, I’d do it in a second.”

Wealth doesn’t require market timing. Instead, you need to stay in the game long enough for compounding to work its quiet magic.

Even if Canadians will never be Buffett, his most straightforward advice is the most powerful: Make your hill as long as possible. Then roll the snowball.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

CNBC (1, 3); Yahoo! Finance (2); Public (4); Newswire (5); RBC (6); The Globe and Mail (7)