Buffett is not an investor – he is an owner!
An investor is a teacher who lays $100 a month into a mutual fund, or a salesman who acquires his $2,500 bonus and buys Apple stock instead of going on vacation. An investor is the accountant who has taken out 5% of her paycheck to invest in her company’s 401k plans.
That is not what Buffett does. Warren Buffett buys ample stock to have himself placed on the boards of companies. Even in the starting, when he was not quite a millionaire, the investment partnership he led bought into a company called Sanborn Map Company, where he was made a board member.
When you are a board member of any company, you can guide the company’s direction and the hiring or replacing of CEOs and CFOs. But this is not what you and I can do. You will not end up on the board of a publicly traded company by investing $100, $200, or even $1,000 at a time.
This point is essential for two reasons. First, it takes some of the spark and pull us away from what Buffett does. He does not just find an unrecognized company, buy it, and sit back in Omaha to tally the money he makes. Yes, he is careful about the companies he buys. However, early in his career, he got into the troughs, so to speak, and had an active hand in what many companies he invested in were doing.
Second, it highlights the fact that if you want wealth, you must be an owner. It’s correct that you can save and invest a little over the long haul, and if we do not have a market crash like in 1987, late 2000, or 2008, then you might end up with a couple million dollars at age 65. If, however, you want that cash a bit earlier, then the best way is to own or be involved in ownership of a business.