Financial Thought of the Day February 4, 2016: Berkshire Hathaway: The Ultimate Example of Compound Growth

Building wealth is a function of amount invested, the rate of return and time. Warren Buffett has ran Berkshire Hathaway (NYSE: BRK-A) (NYSE: BRK-B) for over fifty years. From 1964–2014 the company’s class A stock returned 21.6% compounded annually. Here’s what $1,000 would have done with that rate of growth over time in the table below. It takes investment genius to achieve this and this rate is definitely not guaranteed and few people could probably achieve this.

$1,000 Amount
Time	Rate	Amount After Compounding
10 Years	21.6%	$7,068.64
20 Years	21.6%	$49,965.65
30 Years	21.6%	$353,189.06
40 Years	21.6%	$2,496,565.69
50 Years	21.6%	$17,647,319.43

A similar table to the one found above for different compound growth rates can be found here:

15%

10%

2%

William Bias (stockdissector) owns shares in Berkshire Hathaway Class B