How $400 Monthly Could Grow Into Nearly $900K: The Buffett Strategy That Changed Everything

You’ve probably heard of Warren Buffett and his legendary success with Berkshire Hathaway. But what if I told you his most powerful investment recommendation isn’t about picking individual winners—it’s far simpler than that?

For decades, Buffett has repeatedly advised everyday investors to do one thing: put money into a low-cost S&P 500 index fund. Not rocket science. No complex stock-picking required. Just steady, methodical investing in America’s 500 largest companies.

The Math That Keeps Investors Up at Night

Here’s where it gets interesting. If you invested just $400 monthly into the Vanguard S&P 500 ETF with a conservative 10.5% annual return assumption, here’s what your account could look like:

• After 10 years: approximately $78,300
• After 20 years: roughly $291,000
• After 30 years: around $868,200

Those numbers assume you reinvest all dividends and stay the course through market ups and downs. The beauty? You’re not trying to outsmart the market. You’re betting on America’s largest corporations doing what they’ve historically done—grow.

Why $868,200 Isn’t Just Theory

The S&P 500 has delivered positive returns over every rolling 11-year period in the past three decades. Translation: if you bought an index fund at literally any point during that stretch and held it for at least 11 years, you made money.

Compare that to professional money managers. According to S&P Global data, only 4% of large-cap funds beat the index in the last five years. In the last 20 years? Just 2% outperformed. Buffett’s observation holds true: most professionals underperform the amateur who simply sits tight for decades.

What You’re Actually Owning

The Vanguard S&P 500 ETF gives you a piece of 500 large US companies across all sectors. Your top holdings would include tech giants like Apple (7.6% weight), Nvidia (6.6%), and Microsoft (6.2%), alongside Amazon, Alphabet, Meta Platforms, and Tesla. Even Berkshire Hathaway itself makes up 1.6% of the index.

Essentially, you own a slice of the most influential businesses on the planet. And the cost? Just 0.03% expense ratio—meaning $3 annually per $10,000 invested. Finding a cheaper option with better historical performance is nearly impossible.

The Three-Decade Opportunity Window

The S&P 500 has compounded at 10.86% annually over the last 30 years—a period that encompassed everything from tech bubbles to financial crises. That track record suggests similar results are possible ahead. Even using the more conservative 10.5% assumption to add a safety margin, the numbers still paint a compelling picture.

The real advantage? You don’t need to time the market. You don’t need to predict which company will be the next winner. You just need to stay invested through the noise.

Should You Pick Individual Stocks Instead?

Actually, you don’t have to choose. Buffett’s strategy doesn’t require absolute purity. Many investors own both an index fund for stability plus individual stocks for upside potential. That way, if your picks beat the market, great. If they underperform, your index fund cushions the blow.

The point isn’t to avoid stocks entirely—it’s to ensure your core portfolio isn’t dependent on your ability to outguess professional fund managers who, statistically speaking, can’t outguess the market themselves.