Creating wealth often seems like a goal reserved for those with substantial resources, but Warren Buffett, one of the most successful investors in history, demonstrates otherwise. Starting from modest beginnings, Buffett built his fortune through disciplined financial practices and smart investments.

From selling gum as a boy to becoming a billionaire, Buffett’s story shows that strategic planning and consistent financial decisions can transform a middle-class income into lasting wealth.

Despite his enormous net worth of over $100 billion, Buffett lives a surprisingly frugal life. He still resides in the same Omaha house he purchased in 1958 for $31,500, drives reasonably priced cars, and maintains simple spending habits.

Here are eight ways the middle class can build wealth, inspired by Warren Buffett’s tried-and-true strategies. These principles incorporate the benefits of mutual funds to maximize financial growth.

1. Make Investing and Saving a Priority

“Don’t save what’s left after spending; spend what’s left after saving,” Buffett advises.

Building wealth begins with disciplined saving habits. Shift your mindset to prioritize paying yourself first before spending. Automate transfers to set aside a percentage of your income—aim for 20%, but start with what’s feasible and increase over time.

You can save enough to cover an emergency fund (3–6 months of expenses) or invest for emergencies or any goal you plan on achieving in the future.

If a household earning ₦2,000,000 annually saves 20% of their income (₦400,000 per year) and invests it in a balanced mutual fund with an average annual return of 7%, they could accumulate approximately ₦16,398,197 in 20 years.

2. Eliminate Unnecessary Expenses

“If you buy things you don’t need, you’ll soon have to sell things you do need,” says Buffett.

Small, unnecessary purchases can drain resources that could be directed toward wealth-building investments. According to a report, the combination of 5 subscriptions costs ₦15,726.79 or $36.38 monthly. That is an average of 22.2% of the average monthly wage of Nigerians (₦70,791). Cancel those you rarely use to reduce financial waste.

Redirect these funds into investing according to your risk tolerance. For example, a Balanced Fund invests in both stocks and bonds, providing growth potential while reducing volatility. Even small, consistent contributions can grow significantly over time, thanks to compounding.

3. Embrace Low-Cost Index Funds

“A low-cost index fund is the most sensible equity investment for the great majority of investors,” Buffett notes.

Investing doesn’t have to be complicated. Mutual funds are an ideal option for those who want professional management and diversification without needing to pick individual stocks. These funds pool money from multiple investors to invest in a broad range of securities, allowing you to benefit from professional management without needing to pick individual stocks.

4. Avoid High-Interest Debt

Buffett warns, “The most important thing to do if you find yourself in a hole is to stop digging.”

High-interest debt, from loan apps, can severely hinder your ability to build wealth. Instead of letting interest payments eat into your income, prioritize paying off high-interest obligations.

5. Invest in Yourself

Buffett says, “Invest in as much of yourself as you can. You are your greatest asset.”

Your earning potential is one of your most valuable resources. Increasing your skills through education or certifications can lead to higher income, allowing you to invest more.

6. Resist Lifestyle Inflation

Buffett emphasizes the importance of maintaining financial discipline as your income grows. Many middle-class families fall into the trap of upgrading their lifestyle with every raise, leaving little room for savings or investments.

Instead, treat raises and bonuses as opportunities to increase your investment contributions. By maintaining your current lifestyle while investing the extra income, you can accelerate wealth-building and stay ahead of lifestyle inflation.

7. Think Long-Term

“Someone’s sitting in the shade today because someone planted a tree long ago,” Buffett reminds us.

Patience is essential when building wealth. Investing allows you to take advantage of compounding over time.

A ₦120,000 investment growing at 10% annually could grow to approximately over ₦2,000,000 in 30 years. This demonstrates the significant impact of compound interest and the importance of a long-term investment strategy!

8. Stick to What You Understand

“Risk comes from not knowing what you’re doing,” Buffett advises.

Mutual funds are an excellent option for middle-class investors because they are managed by professionals, making them ideal for those who lack the time or expertise to pick individual investments. Before choosing a fund, ensure you understand its objectives, fees, and risks.

To start investing, simply download the ARM One App from the Google Play Store or Apple App Store to get started.

For more information, call us at 02012715002 or 02014609000, or email us at enquiries@arm.com.ng.

Conclusion

Wealth-building doesn’t require vast sums of money to begin. By following Warren Buffett’s principles and leveraging the benefits of mutual funds, middle-class individuals can lay the foundation for long-term financial security.

Invest in mutual funds today and let compounding work for you—your financial future will thank you!