Warren Buffett: This is how much you would earn if you invested $100 a week in these index funds

When you receive some investment advice from Warren Buffett, you might want to pay attention to it. The billionaire CEO of Berkshire Hathaway, one of the richest people in the world, has earned the nickname “The Oracle of Omaha” due to his legendary investment decisions and prowess in the stock market and beyond.

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Berkshire Hathaway, which is essentially a holding company for his investments, has a competitive advantage with him at the helm, having more than doubled the performance of the S&P 500 over an incredible 60-year period, an enviable record that has brought him much praise.

However, for most investors, Buffett is a big proponent of low-cost index funds. Why has Buffett said this repeatedly and how well has the S&P 500 done? Here are some investing tips from the man himself that will hopefully help you increase your net worth.

In his long and storied career, Buffett has backed low-cost mutual funds on numerous occasions. Here are just some of the key tenets of his quotes on the topic:

• In 1993, Buffett told his shareholders: “By investing periodically in an index fund, for example, the know-nothing investor can actually outperform most investment professionals. Paradoxically, when ‘dumb’ money recognizes its limitations, it stops being ‘dumb’.”

• In 2020, he continued to support the S&P 500 at Berkshire Hathaway’s annual meeting, telling shareholders, “In my opinion, for most people, the best thing they can do is own the S&P 500 index fund. People will try to sell them other things because if they do that, they’ll make more money.”

• In “The Little Book of Common Sense Investing” by Vanguard founder and former CEO John Bogle, Buffett said, “A low-cost index fund is the most sensible capital investment for the vast majority of investors.”

In one of his most direct messages, Buffett described his philosophy to Becky Quick on CNBC’s On the Money: “Constantly buy a low-cost S&P 500 index fund. I think it makes the most sense pretty much all the time…Keep buying it through thick and thin, and especially through the bad.”

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As befits such a legendary investor, Buffett put his money where his mouth was in 2007, betting $1 million that the S&P 500 would outperform hedge funds over the next 10 years. Ted Seides, a hedge fund manager at Protégé Partners, took the bet and picked five hedge funds that he said would outperform the S&P 500 over the next decade.

Unfortunately for Seides, the bet was so lopsided in favor of Buffett and the S&P 500 that he acknowledged he had lost before the 10 years were up. After all, the S&P 500 had outperformed Seides’ hedge fund selection, with an average annual return of 7.1% versus 2.1%.

Except for 2008, when the S&P 500 lost nearly 39% of its value, the index outperformed the hedge fund group in every year of that decade.

Over the past 20 years, the S&P 500 has posted an average annual return of 9.75%, nearly in line with its long-term average.

Here’s what you would have now if you invested in the S&P 500 20 years ago, based on different starting amounts:

• $1,000 would grow to $2,533

• $5,000 would grow to $12,665

• $10,000 would grow to $25,331

• $20,000 would grow to $50,662

• $50,000 would grow to $126,654

• $100,000 would grow to $253,308

Over the past decade, it would have done even better, as the S&P 500 posted an average annual return of a whopping 12.68%.

This is the current amount of your account balance if you had invested over the last 10 years:

• $1,000 would grow to $3,300

• $5,000 would grow to $16,498

• $10,000 would grow to $32,997

• $20,000 would grow to $65,993

• $50,000 would grow to $164,983

• $100,000 would grow to $329,965

As he wrote in Berkshire Hathaway’s 2013 annual letter to shareholders, Buffett has specific advice for the manager of his estate after his death. “My advice to the manager couldn’t be simpler: put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund.”

Obviously, Buffett wouldn’t want to waste the money he leaves behind, and that could be his biggest endorsement of the S&P 500 Index.

Caitlyn Moorhead contributed to this article.

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This article originally appeared on GOBankingRates.com: Warren Buffett: Here’s How Much You’d Make If You Invested $100 Per Week In These Index Funds