No savings at 50? I'd use Warren Buffett's methods to build wealth with ASX shares

It's never too late to start investing in the share market.

| More on:
A man walks up three brick pillars to a dollar sign.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Thankfully, it is never too late to start building wealth, even if you find yourself at 50 with little to no savings.

One of the most famous investors of our time, Warren Buffett from Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), has demonstrated that significant wealth can be created through very simple investment principles. And by applying his time-tested methods to investing in ASX shares, you could pave the way to financial freedom.

Starting your journey at 50

Assuming you have no current savings but can manage to invest $1,000 each month into ASX shares, the power of compounding could work wonders for your financial future if you follow Warren Buffett's investment strategy.

This includes investing in companies with sustainable competitive advantages, strong business models, positive outlooks, and fair valuations.

So, let's assume an annual return of 9%, which is actually below the 30-year average for ASX shares, and see what could happen over different timeframes.

15 years investing like Warren Buffett

Over a 15-year horizon, regularly investing $1,000 per month into ASX shares at a 9% annual return could deliver impressive results.

After 15 years, your investments could have grown to just over $370,000. That's an impressive figure for someone who began with no savings and illustrates the power of staying invested and remaining committed to the plan.

In 20 years

If you keep going through to the 20-year mark, you will see just what a difference compounding can make to your wealth.

An additional five years of investing like Warren Buffett earning the same return would take the value of your portfolio to approximately $640,000.

25 years of investing

The true power of Warren Buffett's investment approach becomes evident over a 25-year period. By sticking to your $1,000 monthly investments in ASX shares, the magic of compounding could transform your portfolio to just over $1,050,000. This means you will have reached millionaire status, all thanks to the principles espoused by the Oracle of Omaha.

Overall, if you find yourself at 50 with no savings, don't lose hope. By adopting Warren Buffett's patient and steady investment approach with ASX shares, you can still achieve significant wealth accumulation.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Berkshire Hathaway. The Motley Fool Australia has recommended Berkshire Hathaway. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on How to invest

Man pointing an upward line on a bar graph symbolising a rising share price.
How to invest

How to invest when the ASX hits a record high

Worried about buying at today's prices? Here's why you shouldn't be concerned.

Read more »

A man wearing glasses sits back in his desk chair with his hands behind his head staring smiling at his computer screens as the ASX share prices keep rising
How to invest

Lessons from a self-made ASX millionaire

Here's how he did it.

Read more »

A couple cheers as they sit on their lounge looking at their laptop and reading about the rising Redbubble share price
How to invest

$20,000 in savings? Here's how to target $1,000 of passive income each month

This could be the easiest way to build a meaningful passive income from the share market.

Read more »

Three happy office workers cheer as they read about good financial news on a laptop.
How to invest

The 3 rules new ASX share investors should always follow

These rules could help you generate wealth in the share market.

Read more »

Person holding Australian dollar notes, symbolising dividends.
How to invest

How to build a $1,500 monthly income stream with ASX dividend shares

It isn't as hard as you think to build a monthly income stream on the share market.

Read more »

A smiling woman sits in a cafe reading a story on her phone about Rio Tinto and drinking a coffee with a laptop open in front of her.
How to invest

How to start your ASX share portfolio with just $1,000

Investing doesn't need to be hard. Here's an easy way to start.

Read more »

Happy young woman saving money in a piggy bank.
How to invest

How I'd invest $250,000 in Australian dividend stocks to never worry about money again

Here are a number of stocks that could be top options for income investors with money to put into the…

Read more »

Warren Buffett
How to invest

5 easy steps to invest like Warren Buffett with ASX shares

It isn't as hard as you might think to invest like the Oracle of Omaha.

Read more »