Warren Buffett, the chairman and CEO of Berkshire Hathaway, has long been a vocal proponent of passive investing. In his 2013 letter to shareholders, he outlined specific instructions for the management of his wife’s inheritance following his death. Buffett directed that 90% of the cash be invested in a very low-cost S&P 500 index fund, specifically citing the Vanguard S&P 500 Index Fund as an example.

Buffett’s rationale is rooted in the belief that most investors, including institutional professionals, fail to outperform the market over the long term after accounting for fees and taxes. By choosing an index fund that tracks the 500 largest publicly traded companies in the U.S., he argues that an investor can achieve solid results with minimal effort and expense. He explicitly advised against attempting to pick individual stocks or timing the market, suggesting that such efforts are often counterproductive for the average person.

While Buffett is famous for his own stock-picking prowess at Berkshire Hathaway, he maintains that his strategy is not easily replicated by others. He views the S&P 500 index fund as the most reliable vehicle for long-term growth, emphasizing that the low management fees associated with these funds prevent the erosion of returns over decades. This advice remains a cornerstone of his public philosophy on personal finance, aimed at providing his family with a stable, low-maintenance financial future.