'There's no question about it': Warren Buffett and Bill Gates reveal the same 1-word secret to success

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World-renowned billionaires Warren Buffett and Bill Gates built their fortunes in very different industries. But when asked to sum up the secret to their success in just one word, they both gave the exact same answer: focus.

For Gates, that meant an obsession with coding as a teenager that eventually led him to co-found Microsoft. Buffett, meanwhile, developed an early fascination with investing that helped make him one of history’s most successful investors.

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“He was focused on software, I was focused on investments,” Buffett told CNBC (1). “And it gave me a big advantage to start very young — there’s no question about it.”

Their shared philosophy offers a valuable lesson for everyday investors: Success isn’t necessarily about chasing every opportunity. Sometimes, it’s about identifying what matters most and tuning out the distractions.

Here are three ways to apply that philosophy to your own investment strategy.

Start early and stay focused

When Buffett was just 11 years old, he invested $114.75 of his savings in three shares of oil and gas company Cities Service. It was the beginning of a lifelong fascination with investing that would eventually help him build a multibillion-dollar fortune.

Buffett has long championed the power of compounding, which allows investment earnings to generate additional earnings over time. He once compared the process to rolling a snowball down a hill.

“We started building this little snowball on top of a very long hill,” he said at Berkshire Hathaway’s annual shareholders meeting in 1999 (2). “The trick is to have a very long hill, either start very young or live to be very old.”

Of course, not everyone starts investing at 11. But even if you’re getting a later start, consistently putting money aside can be more productive than waiting for the perfect moment to invest.

And you don’t necessarily need a large sum of money to build that habit. In fact, you can start by putting the spare change from everyday purchases to work.

That’s where Acorns comes in. The automated investing app helps you stay focused on building wealth by turning ordinary purchases into opportunities to invest, without having to make a new decision every time.

Just link your debit or credit cards and Acorns rounds up your purchases to the nearest dollar, investing the difference. That means a $3.25 morning coffee could turn into a 75-cent contribution toward your future.

Your round-ups are invested in a diversified portfolio of ETFs tailored to your risk tolerance. You can also invest in specific sectors of the economy through custom portfolios, including energy, consumer staples, utilities and other industries.

And because building wealth is about consistency, not just getting started, you can supplement your round-ups with recurring contributions. Sign up with a $5 recurring deposit and Acorns will add a $20 bonus to help get your investing habit underway.

But staying focused on your financial future doesn’t mean investing every dollar you save. Money you might need for emergencies or near-term expenses generally belongs somewhere more accessible, where it isn’t exposed to stock market swings.

Keeping a dedicated cash reserve can help you avoid selling investments at an inconvenient time when an unexpected expense arises. A high-yield cash account can also allow those savings to earn interest while you work toward your longer-term investing goals.

A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.

A Wealthfront Cash Account currently offers a base rate APY of 3.55% through program banks. With a new client boost and direct deposit incentive, referred clients can earn up to a 4.55% APY.

That’s nearly 10 times the national deposit savings rate, according to the FDIC’s October report (3).

With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8 million FDIC Insurance eligibility through program banks.

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Understand your investments

Consistency is important, but so is understanding where your money is going. After all, Buffett didn’t build his fortune simply by buying stocks and hoping for the best. He developed a disciplined approach to evaluating businesses and their long-term prospects.

Buffett is a well-known proponent of value investing, which involves identifying companies whose shares appear to trade below their intrinsic value.

He typically favors businesses with durable competitive advantages, reliable earnings, healthy cash flow and manageable debt. And once he finds a company he believes in, he’s often willing to hold on for years.

As he famously wrote in his 1996 letter to shareholders (4): “If you aren’t willing to own a stock for 10 years, don’t even think about owning it for 10 minutes.”

That doesn’t mean everyday investors need to spend hours analyzing corporate balance sheets. But understanding the basics of what you own can help you make more informed decisions, especially when markets get volatile.

For individual stocks, that might mean looking at a company’s revenue, profitability, debt and competitive position. For mutual funds and ETFs, it means understanding which assets they hold, what fees they charge and how those investments fit into your overall portfolio.

It’s also worth reviewing your investments periodically to see whether your portfolio remains appropriately diversified. An investment that has performed particularly well might now represent a much larger share of your holdings than you originally intended.

And remember that even Buffett has made mistakes. The goal isn’t to predict every market movement or find the next blockbuster stock. It’s to understand the investments you’re making, recognize the risks and avoid letting short-term excitement distract you from your long-term objectives.

Develop a long-term plan

Understanding your investments is one thing. Knowing how they fit into your broader financial future is another.

Your investment strategy should reflect more than which stocks or funds you own. It also needs to account for when you’ll need the money, how much risk you can afford to take and how your goals might change as you approach retirement.

That’s where Buffett and Gates’ philosophy of focus becomes especially relevant. Rather than constantly reacting to market headlines or chasing the next big opportunity, having a clear plan can help you concentrate on decisions that actually matter to your financial future.

And there’s research suggesting that professional guidance can make a measurable difference.

According to research from Envestnet (5), working with a financial advisor who successfully implements strategies can potentially add around 3% in annual value for their clients.

Of course, not everyone needs a financial advisor. But if you’re unsure how to balance competing financial priorities, prepare for retirement or determine whether your investments align with your goals, getting a second opinion could be worthwhile.

Finding the right professional is important, too. An advisor who understands your circumstances can help you build a strategy that reflects your priorities rather than offering a one-size-fits-all approach.

That’s where Advisor.com comes in. The platform helps take the guesswork out of finding financial guidance by connecting you with vetted advisors whose expertise aligns with your needs.

Advisor.com evaluates advisors based on factors including their track records, client ratios and regulatory backgrounds. Its network includes fiduciaries, who are legally obligated to act in their clients’ best interests.

After answering a few questions about your finances, goals and preferences, its AI-powered matching tool can connect you with a qualified expert who may be a good fit for your situation.

You can then schedule a free initial consultation, with no obligation to hire, to discuss your goals and determine whether working together makes sense.

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Article Sources

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YouTube (1); CNBC (2); Federal Deposit Insurance Corporation (3); Berkshire Hathaway (4); Envestnet (5)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.