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Berkshire Hathaway’s annual meetings give shareholders the opportunity to pick CEO Warren Buffett’s brain on a wide range of topics.

However, one investor who attended the conference in 1999 cut right to the chase.

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“Mr. Buffett, how do I make $30 billion?” he asked.

As always, the Oracle of Omaha conveyed complicated ideas in simple terms. Here are the three crucial rules that helped the 93-year-old accumulate a massive fortune and that could help ordinary investors too.

Start young

Buffett’s best advice for investors is to get started as early as possible. He has a simple metaphor to explain his wealth-building strategy.

“We started with a little snowball on top of a very tall hill,” he said. “We started at a very early age in rolling the snowball down, and of course, the nature of compound interest is that it behaves like a snowball.”

The length of Buffett’s career is a key piece of his enormous wealth. He bought his first stock at the age of 11. He’s now 93 years old and still actively investing.

The majority of Buffett’s wealth was accumulated after he turned 65. In 1999, his net worth was just $30 billion. Today, it’s four times greater at over $140 billion, according to Bloomberg.

In other words, one of the keys to Buffett’s long term success was investing early and often.

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Search for small companies

Buffett said that if he started investing again today with $10,000, he would focus first on small businesses.

“I probably would be focusing on smaller companies because I would be working with smaller sums and there’s more chance that something is overlooked in that arena,” he said at the shareholder meeting.

In his early days, the billionaire investor focused on companies that would be considered small-caps. He bought a tiny furniture company in Nebraska in 1983 when it was still expanding across state lines. He acquired See’s Candies when it made just $4 million in annual profits in 1972.

These small businesses were overlooked, undervalued and had room to grow, which gave Buffett the chance to buy in early.

This trend continues today. Small-cap stocks were around 30% cheaper than large cap stocks as of the start of the final quarter of 2023, according to an analysis by BNP Paribas. This valuation gap is near a 25-year low, suggesting the potential for small-cap outperformance as market conditions shift, based on a report by Royce Investment Partners.

If small-cap investments sound too much like micro-management, you could instead consider using an automated investment portfolio to take some of the pressure off individual stock picking. Platforms like Wealthfront Automated Investing can help you start investing with as little as $1.

Depending on your risk profile, Wealthfront can create a customized portfolio of low-cost index funds combining up to 17 global asset classes. Wealthfront can also automatically rebalance your portfolio, diversify your deposits and help reduce your tax liability by tax-loss harvesting.

Even better, up to $500,000 of your deposits with Wealthfront Invest are protected by the Securities Investor Protection Corporation. This means that, in the event of a brokerage failure, your cash and securities are protected.

If you get started today, you can snag a $50 deposit bonus when you open your first investing account with $500 or more.

Circle of competency

Thomas J. Watson Sr., the founder of IBM, once said, “I’m no genius. I’m smart in spots — but I stay around those spots.” That’s the mantra Buffett has applied to his investing too.

Investing is risky, and Buffett has mitigated that risk by sticking to industries he understands. Much of his portfolio is focused on either consumer goods businesses or financial service companies. This disciplined approach helps him manage risk and make confident, long-term decisions.

Ordinary investors can similarly reduce risk by sticking to their circle of competency and avoiding speculation.

If you’re not sure where your strengths lie as an investor, that’s where platforms like Moby can come in. Moby offers expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts.

In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee.

Moby’s team spends hundreds of hours sifting through financial news and data to provide you with stock and crypto reports delivered straight to you. Their research keeps you up-to-the-minute on market shifts, and can help you reduce the guesswork behind choosing stocks and ETFs.

Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.

Another path is to work with a single, dedicated financial advisor to find your investment angle — no matter where you are in your financial journey.

A good advisor can help ensure your investment strategy aligns with your personal goals and long-term financial plan.

But with over 321,000 financial advisors in the U.S., according to the Bureau of Labor Statistics, where do you start?

One option is to search for a financial advisor near you with Advisor.com. How it works is simple: Just answer a few questions about your finances and goals, then Advisor.com will match you with a financial advisor near you.

From here, you can book a free consultation call with no obligation to hire.

The best part? Advisor.com is a SEC registered advisory network, and so are the registered investment advisors you can be matched with. This means that they have a legal obligation to look out for your best financial interests.

After all, smart investing starts with self-awareness and succeeds with the right guidance.

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This article provides information only and should not be construed as advice. It is provided without warranty of any kind.