I’m using the Warren Buffett method to build wealth in 2024
Story by Christopher Ruane
Compounding builds wealth
Given how successful his company Berkshire Hathaway has been though, why does it not pay dividends?
The reason is that Buffett is a big believer in compounding. That basically means reinvesting earnings, whether in the form of dividends or capital gains.
He compares it to pushing a snowball downhill. As it goes, it picks up more snow that, in turn, picks up even more snow. In Buffett’s analogy, the snow represents money.
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