On compounding and starting early

On the power of compounding:

What if Buffett got serious about investing when he was age 22 – just out of college – instead of age 10? Imagine he spends his 20s learning about investments, and his net worth at age 30 was in the still-impressive 90th percentile. Using today’s net worth percentiles and adjusting them for 1960s-era inflation, that would mean he’d be worth about $24,000 at age 30.

Now we can do some fun calculations.

If, at age 30, Buffett was worth $24,000 instead of the $1 million he actually accumulated, and went on to earn the same returns, how much would he be worth today?

$1.9 billion.

That’s 97.6% lower than his actual net worth of $81 billion.

The punchline is that 97.6% of Buffett’s current success can be directly tied to the base he built in his teens and 20s.

The whole article is a wonderful read; it’s unfair to quote just this bit.