"Warren Buffett has repeatedly advised investors to put their money in low-cost S&P 500 index funds and hold them for decades. He has been so consistent that his instructions for his wife's inheritance specify 90% in an S&P 500 index fund and 10% in short-term government bonds, as detailed in his 2013 shareholder letter. The advice is simple, proven, and requires almost no financial expertise. Yet most Americans ignore it."
"You do not need to pick stocks, time the market, or hire expensive advisors. The S&P 500 has delivered 251.61% over the past decade, and that kind of compounding works if you leave it alone. The problem is that leaving it alone requires living below your means, and Americans are not doing that. The personal savings rate dropped from 6.2% in the first quarter of 2024 to 4.2% by the third quarter of 2025. Households are spending roughly 96 cents of every dollar they earn."
Low-cost S&P 500 index funds held for decades offer simple, proven returns using compounding and require almost no financial expertise. The recommended allocation of 90% S&P 500 and 10% short-term government bonds targets long-term growth and stability. The strategy depends on consistent savings and living below means; low personal savings rates and high household spending leave many without investable funds. The approach assumes a 10-year-plus horizon, stable income, and the ability to ignore short-term volatility. Housing, healthcare, and sequence-of-returns risk can undermine outcomes for workers near retirement or those who must withdraw during market downturns.
Read at 24/7 Wall St.
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