Investing millions or billions of dollars at a time may be the norm for Warren Buffett and his team at Berkshire Hathaway (NYSE: BRK.B), but don't worry if you don't have that kind of luxury. Even investing as little as $300 a month can reap significant rewards by following his methods and approach.
While replicating his $100 billion+ fortune over the next 80 years may not be feasible, adopting his mindset and strategy could lead to a more comfortable and luxurious lifestyle in the long run for readers.
Buffett loves to read
One of the most powerful tools for investors is knowledge. Buffett has explained many times that he spends most of his workday reading books, financial reports, and newspapers.
Staying informed can provide valuable insights into a company's operations, capital allocation, managerial expertise, efficiency, and addressable market, among many other factors. These are all important items to consider before making an investment decision.
And not just for the ASX shares you plan to buy. Understanding weakness in a business could reveal a more promising competitor or the formation of new market opportunities. If you spot things like this in your research, you could potentially identify lucrative stocks early on in their journey.
Let compounding work for you
Leveraging compounding can work wonders for a portfolio and ultimately an investor's wealth. Just look at Buffett, who has been benefiting from it for decades by making consistent investments.
And while it can be tempting to stop investing during times of volatility, waiting out the storm is seldom the best course of action. That's because waiting for financial markets to settle down is a form of market timing, which history has shown is a loser's game based mostly on luck.
Missing out on incredible gains is an inevitable consequence of waiting for the storm to pass for ASX shares. After all, stock market recoveries are some of the most lucrative periods for investors to capitalise on. So, if you miss that rebound, your portfolio could be left behind.
This is something that Buffett won't miss out on. Despite recent chaos with inflation, interest rates, and the banking crisis, he has been on a shopping spree.
Investing $300 a month
If you wanted to follow in Buffett's footsteps on a budget, you could look at drip-feeding $300 a month into an investment portfolio.
It may not sound like it has the potential to be very lucrative, but history has shown that it can be.
For example, $300 a month invested in ASX shares for the last 30 years (generating the market return of 9.6% per annum), would have turned into almost $580,000.
And thanks to the power of compounding, if you were to do the same for just 6 more years, you would have broken through the million dollar mark.
The key is to find a strategy and stick with it through thick and thin.
