With no savings at 50, I'd follow Warren Buffett's approach to build wealth

Following Buffett's lead could help you build a significant investment portfolio.

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Warren Buffett

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If you've turned 50 and don't have any savings, don't worry.

That's because if you can spare a little capital each month, you could still build significant wealth by following the lead of Warren Buffett.

During his time with Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), Buffett has shown that wealth can be created through very simple investment principles. And by applying his time-tested methods to investing in ASX shares, you could also pave the way to financial freedom.

Investing like Warren Buffett

If you can manage to invest $1,000 each month into ASX shares, then thanks to the power of compounding, you could build a sizeable investment portfolio by following Warren Buffett's investment strategy.

This includes investing in companies with sustainable competitive advantages (or moats), strong business models, positive long-term growth outlooks, and fair valuations.

It is worth noting that Warren Buffett emphasises fair valuations over cheap valuations. Sure, cheap would be ideal, but as he famously quipped:

Better to buy a wonderful business at a fair price than a fair business at a wonderful price.

Compounding our way to wealth

Let's assume you can generate an average annual return of 10%, which is in line with historical returns.

By investing $1,000 a month into quality ASX shares for 15 years, you would grow your portfolio to $400,000.

But you don't have to stop there. If you're able to keep going, then you would see your portfolio increase to approximately $725,000 after a further five years if you continued to achieve a 10% return.

And if you can keep this up for another five years, bringing your total investment timeframe to 25 years, your portfolio would have ballooned to almost $1.25 million.

All in all, this shows that by following Warren Buffett's investment style, it's never too late to start investing.

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.

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