Back in 1999, investment guru Warren Buffett shared his strategy for investing a sum of $10,000, highlighting the significance of an early start and a focus on smaller companies.

Buffett shared this advice during the 1999 Berkshire Hathaway’s annual shareholders meeting. The investor, who was 68 years old at the time and has since amassed a net worth of over $120 billion, underscored the role of compound interest in wealth creation.

Speaking at the meeting, he said timing—not tactics—was key when he was asked how someone could amass $30 billion, roughly the value of his own wealth then.

Buffett proposed that if he were a recent college graduate in 1999 with $10,000 to invest, his strategy would involve selecting smaller companies. He argued that smaller amounts are more likely to be overlooked in this sector.

Buffett also stressed the need for self-reliance in investment decisions, encouraging investors to understand their strengths and act decisively when they spot a promising opportunity. “You can’t look around for people to agree with you,” he said.

Despite his emphasis on smaller companies, Buffett is a well-known proponent of index funds. In 2017, he suggested investors to “consistently buy an S&P 500 low-cost index fund” and to continue buying “through thick and thin, and especially through thin.”

Why It Matters: Buffett’s advice from 1999 still holds relevance today, especially for young investors. His emphasis on starting early, focusing on smaller companies, and the power of compound interest are timeless investment principles. His advice on self-reliance in investment decisions also underscores the importance of personal finance education.

Despite his advocacy for index funds, his focus on smaller companies highlights the potential of these firms in wealth creation.

Buffett’s recent comment on his fortune being “incomprehensible” serves as a reminder that while wealth accumulation is important, aspiring for astronomical figures may not be necessary.

It’s about making smart, informed decisions and letting your money work for you over time.