Warren Buffett looks for undervalued companies with a wide economic moat. He shuns get-rich-quick investments and focuses on picking businesses rather than stocks.

The Oracle of Omaha's magic touch has made scores of investors rich. Had you bought Berkshire Hathaway (BRK.A -0.10%) (BRK.B -0.09%) shares at the start of Buffett's tenure, you'd have gotten returns of 3,787,464% over a 58-year holding period.

But how can a regular person apply Buffett's strategy to basic financial goals, like saving for retirement? What if you don't have the time or energy to sift through balance sheets and income statements? Fortunately, Buffett has plenty of advice for us mere mortals on how to get rich by the time we retire.

Berkshire Hathaway chairman Warren Buffett.

Image source: The Motley Fool.

1. Invest in index funds, not individual stocks

The first piece of good news for ordinary investors: Buffett doesn't think most individuals should pick their own stocks in the first place.

Buffett has advised only picking stocks if you're willing to devote six to eight hours each week to research. Otherwise, he suggests investing in index funds using a dollar-cost averaging strategy. Dollar-cost averaging simply means you invest a predetermined amount at regular intervals. If you invest in your employer's 401(k) or make automatic monthly contributions to an individual retirement account (IRA), you're already doing just that.

Buffett suggests most people invest in an S&P 500 index fund. In fact, in 2007 he famously challenged hedge fund managers to a bet, positing that a low-cost S&P 500 index could beat the performance of the funds of their choosing over 10 years. Only one hedge fund manager, Ted Seides, accepted that bet -- and the S&P 500 fund won by a landslide. (Buffett donated his $2.2 million prize to Girls Inc. of Omaha.) 

One good choice is the Vanguard S&P 500 ETF (VOO 0.08%). Your returns will mirror those of the U.S. stock market, which have historically been about 10% annually. Compounded over time, though, those returns are more than enough to make you rich. The expense ratio is just 0.03%, which equates to just $3 in fees on a $1,000 investment. 

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2. Get rid of credit card debt

If you want to get rich, think of paying off high-interest debt as an investment. Buffett recalled at a Berkshire Hathaway shareholder meeting in 2020 how a friend sought his advice on what to do with some money she'd recently received.

He asked her if she had credit card debt. The answer was yes -- and she was paying about 18% in interest.

For Buffett, this was a no-brainer: "If I owed any money at 18%, the first thing I'd do with any money I had would be to pay it off," he said. "It's going to be way better than any investment idea I've got."

Remember: The stock market's average annual returns are about 10%, which means that you could earn about $100 on a $1,000 investment in a typical year. But carrying a $1,000 credit card balance at 18% interest will cost you $180 a year. 

A smart move for anyone with credit card debt: Invest enough to get your employer's 401(k) match, as many companies will match 50% or more of your contribution up to a certain percentage. A 50% match is a 50% return on your money right off the bat. But put any extra money beyond that toward paying off your balance, rather than investing. Once your credit card balance is $0, you can invest your excess funds.

3. Make time your friend

Buffett's stock-picking genius isn't his only weapon. It's also the power of compounding.

Buffett bought his first stock at age 11. He's 92 now, so it's safe to say he's been investing longer than practically anyone on the planet. But what's often overlooked is just how much of Buffett's fortune was accumulated later in life. 

When Morgan Housel wrote his 2021 bestseller The Psychology of Money, Buffett's net worth was $84.5 billion. But Housel points out that $84.2 billion of that fortune came after Buffett was 50. And Buffett amassed $81.5 billion of his wealth in his mid-60s and later.

"Had he started investing in his 30s and retired in his 60s, few people would have ever heard of him," Housel writes.

Obviously, we can't go back in time and start investing at age 11. But if your goal is simply to retire comfortably, the lesson is the same: Compounding is a serious wealth builder.

Most of us won't have our money invested for 80-plus years. But even if you can delay retirement for a couple of years to give your money more compounding time -- especially if you got a late start on investing -- it could make a huge difference for your nest egg.