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Warren Buffett: Why Most People Should Invest In S&P 500 Index

why have you advised your wife to invest in index funds after your death rather than berkshire hathaway i believe munger has cancelled his offspring to quote not be so dumb as to sell she she won't be she won't be selling any berkshire to buy the index funds all all of my berkshire every single share will go to philanthropy so that i don't even regard myself as owning berkshire you know basically it's it's committed and i've i so far about 40 percent has already been distributed so the question is somebody who is not an investment professional will be i hope reasonably elderly by the time that the uh estate gets settled and what is the best investment meaning one that there would be less worry of any kind connected with and less people coming around and saying why don't you sell this and do something else and all those things she's going to have more money than she needs and the big thing then you want is money not to be a problem and there will be no way that if she holds the s p of virtually no way absent something happened with weapons of mass destruction but virtually no way that she will shall have all the money that she possibly can use to have a little liquid money so that if stocks are down tremendously at some point they close the stock exchange for a while anything like that she'll still feel that she's got plenty of money and the object is not to maximize it doesn't make any difference whether the amount she gets doubles or triples or anything of the sort the important thing is that she never worries about money the rest of her life and i had an aunt katie here in omaha charlie knew well and worked for her husband as did i and she worked very hard all her life and had lived in a house she paid i think i don't know eight thousand dollars for 45th and hickory all her life and uh because she was in berkshire uh she ended up she lived in 97.

she ended up with you know a few hundred million and she would write me a letter every four or five months and she said dear warren you know i hate to bother you but am i going to run out of money and and i would i would write her back and i'd say dear katie it's a good question because if you live 986 years you're going to run out of money and and then about four or five months later she'd write me the same winner again and i i have seen there's no way in the world if you've got plenty of money that it should become a a minus in your life and there will be people if you've got a lot of money that come around with various suggestions for you sometimes well-meaning sometimes not so well-meaning so if you've got something that's certain to deliver you know it was all in berkshire they'd say well if warren was alive today you know he would be telling him to do this i i just don't want anybody to go through that and the s p will be a i think actually what i'm suggesting is what but a very high percentage of people should do something like that and i don't think they will have us i think there's a chance they won't have as much peace of mind if they own one stock and they've got neighbors and friends and relatives that are trying to do some like i say sometimes well-intentioned sometimes otherwise to do something else and so i think it's a policy that'll get a good result and it's likely to stick charlie well as becky said the wonders are different i i want them to hold the berkshire well i want to hold the berkshire too no i bet i mean i i i don't like them i recognize the logic of the fact that that s p algorithm is very hard to beat in a diversified portfolio of big companies it's all but impossible for most people but you know it's i'm just more comfortable with the berkshire well it's the family business yeah yeah but but it uh i've just i've seen too many people as they get older particularly being susceptible just having to listen to the arguments of people coming well if you're going to protect your heirs from the stupidity of others you may have some good system but i'm not much interested in that subject [Laughter] okay you

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