Warren Buffett has long cautioned investors about the dangers of leverage, the practice of using borrowed money to boost returns. While it may seem attractive, he warns it can quickly destroy even the most successful investors when markets shift.
“Whenever a bright person, a really bright person, goes broke that has a lot of money, it’s because of leverage,” Buffett told shareholders at Berkshire Hathaway’s 1999 annual meeting. “It would be almost impossible to go broke without borrowed money being in the equation.”
For Buffett, the lesson is clear: long-term success in investing comes from patience and discipline, not debt-fueled risk.
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© 2026 David Mazor
Disclosure: David Mazor is a freelance writer focusing on Berkshire Hathaway. The author is long in Berkshire Hathaway, and this article is not a recommendation on whether to buy or sell the stock. The information contained in this article should not be construed as personalized or individualized investment advice. Past performance is no guarantee of future results.