Baseball Hall of Famer Yogi Berra once said, “Baseball is 90% mental; the other half is physical.” Something similar can be said about money and investing — 90% of it is behavior, and the other “half” is knowledge or talent. Let me explain what I mean.
We all know who Warren Buffett is — and if you don’t, you’ve at least heard the name. In 2020, Buffett’s net worth was approximately $84.5 billion. Here’s the surprising part: $84.2 billion of that was accumulated after he turned 50, and $81.5 billion came after he turned 65. For reference, Buffett is now 95 years old and has an estimated net worth of around $148 billion (on the low end).
With those figures in mind, no one would argue that Buffett isn’t a great investor. But the key to his success isn’t mind-boggling returns or vast knowledge — it’s behavior and consistency. Before you stop reading and disagree, consider this: Buffett has averaged a 19.9% annual rate of return since 1965, compared to the S&P 500’s 10.4% annual average during the same period. Clearly, Buffett knows what he’s doing — but again, the key isn’t just his returns; it’s that he kept investing.
Had Warren Buffett retired at age 60 to spend more time with family or relax on a beach somewhere, his net worth today would be roughly $3.8 billion. By cutting out 35 years of compounding, his wealth would have been reduced by over 97%.
Now, here’s an interesting comparison. What if I told you Warren Buffett isn’t the most successful investor in terms of annual returns? That title arguably belongs to Jim Simons, founder of Renaissance Technologies. Simons averaged a staggering 66% annual rate of return, yet when he passed away in 2024 at age 86, his net worth was around $31.4 billion.
So why the difference? Why was Simons’ net worth so much lower despite achieving higher returns? Again — it’s not about knowledge, it’s about behavior. Simons didn’t really hit his stride in investing until his mid-50s, whereas Buffett started when he was just 10 years old — over 40 years of missed compounding returns.
Why does this matter to you?
I’m not advocating that you invest in the same companies or use the same portfolios as Simons or Buffett. In fact, diversifying your portfolio is one of the most effective ways to manage risk and achieve long-term stability in your portfolio, something Buffett, historically, doesn’t do.
I’m merely pointing out that consistent behavior when it comes to investing matters exponentially more than picking “winners” in the stock market — the same comparisons and conclusions could just as easily be drawn with Jack and Jill.
The comparison between Simons and Buffett illustrates the power of consistent investing versus waiting or stopping with real dollars and cents. This is where working with a financial advisor can make all the difference. Advisors don’t just help you select investments (the “head knowledge” part) — they help you build a plan and shape your behavior.
Ultimately, your financial behavior is your responsibility, but an advisor can guide you through the stress and uncertainty of planning, helping you stay consistent and focused on your long-term goals.
If you’ve been waiting for the “perfect time” to invest or revisit your financial plan, this is your sign to start now. “The best time to invest was yesterday. The second-best time is now.” — Warren Buffett