Here are Warren Buffett's tips to becoming rich with ASX shares

The Oracle of Omaha's latest letter to shareholders was filled with great advice.

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The latest Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B) letter to shareholders was released at the weekend and contains more words of wisdom from Warren Buffett.

The good news for investors is that a lot of what the Oracle of Omaha said in his letter can be used to build wealth with ASX shares.

What did Warren Buffett say?

In his first letter since the passing of Charlie Munger, Buffett recounted one of the most important things he was told by his long-term business partner. He said:

Warren, forget about ever buying another company like Berkshire. But now that you control Berkshire, add to it wonderful businesses purchased at fair prices and give up buying fair businesses at wonderful prices.

In other words, abandon everything you learned from your hero, Ben Graham.

Buffett ultimately followed Munger's advice and the rest is history. Since 1965, Berkshire Hathaway has grown its book value by an average of 19.8% per annum.

To put that into context, a single $100 investment in ASX shares 58 years ago would have grown into approximately $3.5 million today if it generated that level of return.

Anything else?

Buffett also spoke about picking winners when investing. This could be used by local investors when looking for ASX shares to buy.

Our goal at Berkshire is simple: We want to own either all or a portion of businesses that enjoy good economics that are fundamental and enduring.

Within capitalism, some businesses will flourish for a very long time while others will prove to be sinkholes. It's harder than you would think to predict which will be the winners and losers.

And those who tell you they know the answer are usually either self-delusional or snake-oil salesmen.

As Buffett says, it is impossible to know which ASX shares will flourish over the long term and which will flounder. But if investors build a balanced portfolio filled with high-quality companies with sustainable competitive advantages, they certainly put the odds more in their favour of success.

Let's end now with one final quote from the letter. Buffett said:

One investment rule at Berkshire has not and will not change: Never risk permanent loss of capital.

Thanks to the American tailwind and the power of compound interest, the arena in which we operate has been – and will be – rewarding if you make a couple of good decisions during a lifetime and avoid serious mistakes.

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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