How investors can aim to get rich and retire early by following Warren Buffett

Story by Dr. James Fox

Shot of an young mixed-race woman using her cellphone while out cycling through the city© Provided by The Motley Fool

Warren Buffett’s path to wealth is defined by a deceptively simple mantra: “Rule No. 1: Never lose money. Rule No. 2: Never forget Rule No. 1.” This principle isn’t about eliminating all risk, but about preserving capital and avoiding the kind of large, permanent losses that can devastate long-term returns. 

The mathematics are punishing: lose 50% on an investment, and you’ll need a 100% gain just to break even. Buffett’s focus on capital preservation — through buying quality businesses, insisting on a margin of safety, and steering clear of speculation — has allowed him to generate above-average returns for decades.

How can I ‘get rich’?

But what does ‘getting rich’ mean? For some, it’s financial independence or the freedom to retire early; for others, it’s simply security and peace of mind. Whatever your definition, Buffett’s approach offers a blueprint.

Consider an investor who puts away £500 per month for 35 years, compounding at 10% annually. The result is astonishing. By year 35, their portfolio could grow to nearly £1.9m, with the majority of that growth coming from compounding returns rather than contributions.

Source: thecalculatorsite.com

The key is not just chasing high returns, but avoiding big mistakes and letting time and discipline work their magic. Buffett’s strategy is a lesson in patience, research, and risk management. By focusing on quality, understanding what you own, and refusing to let losses spiral, investors can steadily build wealth and, potentially, retire far earlier than they ever imagined.

The above graph shows the path to £1.9m in 35 years. This would be enough to comfortably deliver around £90,000 annually (tax-free in an ISA) without touching the principal.

However, it’s worth noting that £90,000 in 35 years is worth approximately £37,923 in today’s money. That’s assuming an average annual inflation rate of 2.5%. This calculation uses the present value formula, which discounts the future sum by the cumulative effect of inflation over 35 years.