Recently, I’ve been paying attention to discussions about Warren Buffett’s retirement, and this guy has definitely given us a lot of inspiration. As the leader of Berkshire Hathaway for 60 years, this investment giant has accumulated about $157 billion in wealth, and his investment philosophy isn’t that complicated; many principles we ordinary investors can also apply.

First, let’s talk about cash reserves. Warren Buffett has always emphasized the importance of keeping enough cash on hand so you can act quickly when market opportunities arise. Berkshire now holds $334 billion in cash, although we can’t accumulate that amount, the idea is totally applicable—keep some liquidity, don’t put all your money into one investment. That way, when a good opportunity comes along, you’re ready to take action.

Next is only buying what you understand. Warren Buffett has a famous example: he long avoided tech stocks until he truly understood Apple’s business model, then he bought heavily. Although he missed out on blockbuster stocks like Nvidia, the stocks he did pick performed far better than the S&P 500. This shows that deep understanding is more important than chasing trends.

Let’s also look at debt. Berkshire, on paper, has $126 billion in debt, but their cash is three times that amount, with net debt basically zero, and they earned $424 billion in 2024. This shows Warren Buffett is very cautious with debt—using it only for investments, not for consumption. The same logic applies to ordinary people—except for investment debts like mortgages, credit card debts used for consumption should be paid off as soon as possible.

Patience for long-term holding is also key. Warren Buffett has said his favorite holding period is “forever.” This isn’t a joke but a real approach—giving stocks enough time to grow and enjoying the power of compound interest. This is quite different from most people’s pursuit of short-term gains, but over the long run, the results are remarkable.

The final core principle is buying quality companies at low prices. Berkshire’s portfolio is full of solid businesses, but they buy when prices are cheap. Warren Buffett calculates a company’s “intrinsic value” and only buys when the price is below that. The simplified version is the classic “buy low, sell high,” but executing it requires real patience and judgment.

Honestly, these principles don’t seem complicated, but very few can stick to them. Warren Buffett became one of the wealthiest people in the world by repeatedly applying these basic principles for decades. For us, we don’t need to aim for hundreds of billions, but using these ideas to plan our investments and finances can at least make our retirement more secure.