--- title: Warren Buffett on the Secrets Growing Wealth in America description: Warren Buffett, CEO of Berkshire Hathaway, explains that the secret to wealth in America is a combination of two factors. canonical: https://time.com/5087360/warren-buffett-shares-the-secrets-to-wealth-in-america/ author: Warren Buffett article:opinion: true article:content_tier: free article:published_time: 2018-01-04T12:09:10.000Z article:modified_time: 2026-10-12T08:44:19.702Z article:section: Ideas og:title: Warren Buffett on the Secrets Growing Wealth in America og:description: Warren Buffett, CEO of Berkshire Hathaway, explains that the secret to wealth in America is a combination of two factors. og:url: https://time.com/5087360/warren-buffett-shares-the-secrets-to-wealth-in-america/ og:site_name: TIME og:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt66d8b507f4948c54/6988f64786f68ed1ae6e7b11/optimist-issue-warren-buffett-shares-secrets-wealth.jpg?branch=production&width=1200&quality=75&auto=webp&crop=16:9 og:image:width: 3040 og:image:height: 1710 og:image:alt: optimist-issue-warren-buffett-shares-secrets-wealth og:type: article twitter:card: summary_large_image twitter:title: Warren Buffett on the Secrets Growing Wealth in America twitter:description: Warren Buffett, CEO of Berkshire Hathaway, explains that the secret to wealth in America is a combination of two factors. twitter:image: https://static.time.com/v3/assets/bltea6093859af6183b/blt66d8b507f4948c54/6988f64786f68ed1ae6e7b11/optimist-issue-warren-buffett-shares-secrets-wealth.jpg?branch=production&width=1200&quality=75&auto=webp&crop=16:9 ---  # Warren Buffett Shares the Secrets to Wealth in America > Sponsored content. 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A paid TIME subscription is separate and available at time.com/subscribe-agent. ### Sources * TIME Newsletters: [time.com/newsletters](/c/time-nl-inside-2026q3/newsletters?i=7e18a9d0-9418-43f9-9c69-4968eb6f7981&cr=time-nl-inside-2026q3-v1) ## Video: The Influencers- Nancy Gibbs and Bill Gates [Watch (HLS stream): The Influencers- Nancy Gibbs and Bill Gates](https://cdn.jwplayer.com/manifests/ODjHuYQj.m3u8) (4:43)  _Published 2018-01-04. Nancy Gibbs sits down with guest-editor Bill Gates to discuss optimism in technology and the news._ by [Warren Buffett](https://time.com/author/warren-buffett/) ## Warren Buffett Jan 4, 2018 12:09 PM UTC Nancy Gibbs sits down with guest-editor Bill Gates to discuss optimism in technology and the news. by [Warren Buffett](https://time.com/author/warren-buffett/) ## Warren Buffett Jan 4, 2018 12:09 PM UTC I have good news. First, most American children are going to live far better than their parents did. Second, large gains in the living standards of Americans will continue for many generations to come. Some years back, people generally agreed with my optimism. Today, however, pollsters find that most Americans are pessimistic about their children’s future. Politicians, business leaders and the press constantly tell us that our economic machine is sputtering. Their evidence: GDP growth of only 2% or so in recent years. Before we shed tears over that figure, let’s do a little math, recognizing that GDP per capita is what counts. If, for example, the U.S. population were to grow 3% annually while GDP grew 2%, prospects would indeed be bleak for our children. But that’s not the case. We can be confident that births minus deaths will add no more than 0.5% yearly to America’s population. Immigration is more difficult to predict. I believe 1 million people annually is a reasonable estimate, an influx that will add 0.3% annually to population growth. In total, therefore, you can expect America’s population to increase about 0.8% a year. Under that assumption, gains of 2% in real GDP–that is, without nominal gains produced by inflation–will annually deliver 1.2% growth in per capita GDP. This pace no doubt sounds paltry. But over time, it works wonders. In 25 years–a single generation–1.2% annual growth boosts our current $59,000 of GDP per capita to $79,000\. This $20,000 increase guarantees a far better life for our children. In America, it should be noted, there’s nothing unusual about that sort of gain, magnificent though it will be. Just look at what has happened in my lifetime. I was born in 1930, when the symbol of American wealth was John D. Rockefeller Sr. Today my upper-middle-class neighbors enjoy options in travel, entertainment, medicine and education that were simply not available to Rockefeller and his family. With all of his riches, John D. couldn’t buy the pleasures and conveniences we now take for granted. Two words explain this miracle: innovation and productivity. Conversely, were today’s Americans doing the same things in the same ways as they did in 1776, we would be leading the same sort of lives as our forebears.  An American icon is depicted through composite photography. Stephen Wilkes Replicating those early days would require that 80% or so of today’s workers be employed on farms simply to provide the food and cotton we need. So why does it take only 2% of today’s workers to do this job? Give the credit to those who brought us tractors, planters, cotton gins, combines, fertilizer, irrigation and a host of other productivity improvements. To all this good news there is, of course, an important offset: in our 241 years, the progress that I’ve described has disrupted and displaced almost all of our country’s labor force. If that level of upheaval had been foreseen–which it clearly wasn’t–strong worker opposition would surely have formed and possibly doomed innovation. How, Americans would have asked, could all these unemployed farmers find work? We know today that the staggering productivity gains in farming were a blessing. They freed nearly 80% of the nation’s workforce to redeploy their efforts into new industries that have changed our way of life. You can describe these develop-ments as productivity gains or disruptions. Whatever the label, they explain why we now have our amazing $59,000 of GDP per capita. This game of economic miracles is in its early innings. Americans will benefit from far more and better “stuff” in the future. The challenge will be to have this bounty deliver a better life to the disrupted as well as to the disrupters. And on this matter, many Americans are justifiably worried. Let’s think again about 1930\. Imagine someone then predicting that real per capita GDP would increase sixfold during my lifetime. My parents would have immediately dismissed such a gain as impossible. If somehow, though, they could have imagined it actually transpiring, they would concurrently have predicted something close to universal prosperity. Instead, another invention of the ensuing decades, the Forbes 400, paints a far different picture. Between the first computation in 1982 and today, the wealth of the 400 increased 29-fold–from $93 billion to $2.7 trillion–while many millions of hardworking citizens remained stuck on an economic treadmill. During this period, the tsunami of wealth didn’t trickle down. It surged upward. In 1776, America set off to unleash human potential by combining market economics, the rule of law and equality of opportunity. This foundation was an act of genius that in only 241 years converted our original villages and prairies into $96 trillion of wealth. The market system, however, has also left many people hopelessly behind, particularly as it has become ever more specialized. These devastating side effects can be ameliorated: a rich family takes care of all its children, not just those with talents valued by the marketplace. In the years of growth that certainly lie ahead, I have no doubt that America can both deliver riches to many and a decent life to all. We must not settle for less. _Buffett is the CEO and chairman of Berkshire Hathaway_ ## Transcript [ MUSIC ] So we're pretty sure this is the first time in the nearly century old history of Time, that we have turned over our pens and keyboards to a guest editor. I was thrilled to get the opportunity and, you know, I think people will be a little surprised. What we're trying to tell them. [ MUSIC ] Well this is weird time to be talking about optimism when we have levels of pesimism in division in this country atleast, so where does your counter programing in your hopefullness come from? Well things are. Very different than several hundred years ago. A life span has more than doubled over that time. And even if you take a shorter time frame, say, 30 years ago. Our understanding of treating women properly, of providing gay rights. We are far better off today and our focus is on those things that remain to be done, and there's certainly tons and tons of those. But only by seeing that we've made progress in taking the lessons of where that's gone faster than we expected, where it's gone slower, can we actually accelerate And reduce these huge problems that still remain. What makes you optimistic about the role that technology is gonna be playing in the future of work, for instance? A- I is going to be changing the job market, but in market capitalism, there's always big changes. I don't think there's really anything in the sense of a, you know, problem solving that the machine won't be able to do. I mean, computers are still very weak when it comes to understanding. They can't process a textbook and use the knowledge the way that humans do, but that's being worked on. Do you worry at all about the amount of time either you or all of our kids spend on their screens? Well certainly you can do a lot of things on your screen some of which, you know like if you get playing the same video game again and again, That's not well- balanced. It's probably not gonna develop your capacity fully. There needs to be discipline. Anytime we give somebody a new tool, like when Microsoft Windows had lots of fonts and there were a few years there where people used way too many fonts. Now people have kind of calmed down. It's kind of rare somebody You know is goofing around using some new font. So the discipline about hey when a family is at the table he knows the phone allowed to buzz or not. When a kid goes to bed at night we say, hey the phones on the charger which happens to be outside the bedroom which is a visible fact. Kids. And even adults aren't gonna be perfect at managing the new opportunities. But I think that's all solvable stuff. The normal sort of parental advice and even a few rules will make it so you're mostly getting the benefit. Now you could argue that our. Failure to focus on what's getting better actually suggests that the media generally is missing an enormous story, that there's a bias against the positive. Do you think that's true, and where does that come from? Well news, by its nature, is about A surprise. Which day do you cover malaria deaths being cut in half? Which day do you cover workplace accidents, you know, down by a factor of 50 over the 50 year period? It's society doing what it's supposed to do, and not The kind of shocking airplane crashed type story that people expect. [ BLANK_AUDIO ] It's a lot of fun to give more light to these things, and I enjoyed that a lot. Curating things. Making sure they fit together, trying to expose people to something they might not otherwise see. It's a real privilege. Well, 100 million readers thank you for everything that you've done. Both in this project but obviously much more broadly in so many critical arenas. Well, thanks. 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