Success Takes Stamina

The world is approaching peak soccer fever. After more than 100 matches, the World Cup final takes place on Sunday. Even I, hardly a devoted fan of the game, found myself caught up in the occasional match.

I am particularly fascinated by the elder statesmen on the field, such as Ronaldo, 41, and Messi, 39. They remind me of American investor Warren Buffett, although at 95 he has quite a head start on both of them. Whether on the soccer field or in the stock market, few have ever mastered their game as well as these three. Their shared strength is staying power.

All three started their careers at a very young age. Ronaldo and Messi made their international debuts for Portugal and Argentina at 18. Here is an amusing footnote: Lionel Messi came on as a substitute in the 63rd minute of his first international match and was shown a red card just 43 seconds later. Warren Buffett started even earlier, and without being sent off. He bought his first stock at 11 and launched his first investment partnership, the Buffett Partnership, at 26.

Plenty of other boys and girls buy a stock while they are young or kick a ball around the courtyard as children. Usually, other things eventually take priority, and their talent never develops far enough for a professional career. For this extraordinary trio, it did.

Linear and Exponential

Ronaldo remained largely free of serious injuries throughout his career and scored 146 goals in 233 international appearances. Messi recorded 125 goals in 205 matches. Buffett, meanwhile, propelled Berkshire Hathaway’s share price from $7.60 when he first bought it in November 1962 to an astonishing $745,000 today.

Ronaldo and Messi have spent their careers working within the limits of linear growth. Goals do not compound. Warren Buffett’s wealth, on the other hand, grew exponentially. The remarkable result is that he accumulated 99% of his wealth after his 50th birthday.

There is a clear lesson here for investors. We have to start investing before we can enjoy any success. We also have to keep compounding our wealth with discipline and consistency. Whether our own portfolio beats the major stock indexes in any given year matters far less. What counts is investing steadily and insisting on quality.