Warren Buffett isn't just a successful investor, but a generous one. In fact, he's stated repeatedly that his goal is for the bulk of his wealth to go to charity.
But Buffett isn't just generous with his money. He's also generous with his advice. And here are a few strategies he advocates for growing wealth over time.
1. Load up on index funds
Buffett thinks that broad market index funds, like S&P 500 index funds, are a great bet for everyday investors -- even though he's adopted a different strategy himself that involves hand-picking companies with strong growth potential. And while it's true that index funds won't allow you to beat the performance of the broad market, since their goal is to simply match the returns their benchmarks deliver, they're also a very appropriate investment for people who don't know a ton about picking stocks and want to limit their risk.
See, Buffett doesn't need to rely on index funds since he's an expert at picking stocks himself. And also, because he's so wealthy, he can afford to lose, say, $100,000 overnight without breaking a sweat.
But most people aren't like Buffett in either regard. And so if you're serious about building a solid portfolio -- and one that's nice and diverse -- you may want to consider broad market index funds as well.
2. Hold your stocks for a long time
Buffett has famously said that you shouldn't own a stock for 10 minutes if you aren't prepared to hold it for 10 years. Some people think they can make a quick buck in the stock market, but those are the folks that usually get burned instead.
The reality is that the stock market has a long history of rewarding investors who stick with it for years. But to be clear, you need to give your investments time to not only gain value, but also, recover from downturns. And so whether you decide to fill your portfolio with individual stocks or index funds, you should plan to hold them for as many years as possible.
3. Buy real estate -- but carefully
Although Buffett is a fan of owning a home and financing it with a 30-year mortgage, he's not necessarily the strongest advocate of investing in income properties. But he has been known to invest in REITs, or real estate investment trusts.
The beauty of REITs is that they allow you to invest in real estate without assuming the risks of owning actual property yourself. REITs are companies that derive revenue from owning and operating different properties. Industrial REITs, for example, own warehousing space, while healthcare REITs are comprised of nursing facilities and urgent care centers.
The great thing about REITs is that they can lend to added diversity in your portfolio. And because they tend to pay above-average dividends, they're a great source for generating ongoing income which you can use to reinvest.
Listen to one of the greats
Most people won't come close to matching the success and wealth of Warren Buffett. But that doesn't mean we can't all learn from him. If you're eager to grow a lot of wealth in your lifetime, be sure to take these strategies to heart.