Warren Buffett's 90/10 portfolio model
Model Buffett's 90% low-cost S&P 500 index fund and 10% short-term government bond instruction with your own balance and return assumptions.
Warren Buffett Historical strategy from 2014 Rule located in Berkshire Hathaway, 2014 Portrait: USA International Trade Administration, Public domain, via Wikimedia Commons. Self-hosted by JMM.
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Put your numbers through the rule
The source establishes the rule. The values below belong to you, and the output is JMM's deterministic calculation.
Every field recalculates immediately. Changed values can be copied into a shareable URL.
- Stock-index sleeve
- $1,611,967
- Bond sleeve
- $94,764
- After -35% stock shock
- $1,142,543
The two sleeves compound independently at your rates and receive 90% and 10% of each contribution.
Stock-index sleeve
- Weight
- 90.0%
- Entered return
- 7.0%
- Ending value
- $1,611,967
Short-government-bond sleeve
- Weight
- 10.0%
- Entered return
- 3.0%
- Ending value
- $94,764
What the source says, and what the calculator adds
Source-supported ruleBuffett described instructions for his wife’s trust: 10% in short-term government bonds and 90% in a very low-cost S&P 500 index fund. 
JMM calculationJMM applies the allocation to reader-controlled balances, contributions, returns, horizon, and a simple one-period stock stress. What changes the answer
Simple allocation, concentrated risk
The 90% equity sleeve drives most long-run upside and most short-run loss. The stress result shows that asymmetry without assigning a generic risk score.
The bond sleeve is a stabilizer, not a return promise
Its entered return and the stock path are independent scenario inputs; the calculator does not assume a specific future yield curve.
Who else has run the numbers on this rule
Everyone below has published a position on this specific rule with a figure attached. Each row names the document, the date and the passage, so you can check the number rather than take ours.
- BJavier EstradaProfessor of finance at IESE Business School, Barcelona, publishing in The Journal of Wealth ManagementNarrows the rule
2.3% failure rate over 86 rolling 30-year retirements, against 0.0% for 60/40
Estrada tested the 90/10 split across 86 overlapping 30-year US retirements from 1900 to 2014, starting from a $1,000 nest egg with a 4% initial withdrawal raised by inflation each year and annual rebalancing. The allocation failed in 2.3% of those retirements, against 3.5% for 100% equities and 0.0% for 60/40. His conclusion is that Buffett’s split is a defensible middle ground rather than an optimum, and he notes Buffett never suggested it for investors generally.
although the 60/40 strategy never failed, the 100/0 and 40/60 failed 3.5% of the time, and Buffett’s 90/10 failed 2.3% of the time, there does not seem to be a substantial difference in the failure rates of portfolios holding at least 40% in stocks
The Journal of Wealth ManagementMar 31, 2016Buffett’s Asset Allocation Advice: Take It … with a TwistSpring 2016 issue, page 61, right column, and Exhibit 1 “Static Strategies” on the same page.
Tested over 86 retirements and it survived 97.7% of them. The catch is who it was written for.
Buffett wrote two sentences about a trust for his widow and the internet turned them into a portfolio for everyone. The remarkable thing is that when an academic actually ran it, the advice held: across 86 rolling 30-year US retirements at a 4% withdrawal, 90/10 failed 2.3% of the time, against 3.5% for all-equity and zero for 60/40. That is a real result and JMM would not argue with it. What JMM would argue with is the transplant. A 90% equity sleeve is survivable when the nest egg is large enough that no allocation could break it, and punishing when it is not. Set the stress control to -35% and look at the number before deciding which of those two people you are.
Not the calculator’s limits. The rule’s.
It was sized for a portfolio that cannot fail
The instruction concerned a bequest large enough that the withdrawal rate was never the binding constraint. Copy the allocation without copying that condition and you have kept the risk and dropped the cushion.
Ten percent in bills is liquidity, not ballast
Short-term government bonds cover a couple of years of spending. They do not offset an equity drawdown, and treating the 10% as a hedge misreads what it is for.
What this model does not know
- The instruction concerned a particular trust, not every investor.
- Returns are user scenarios, not forecasts or historical backtests.
- Taxes, fees, inflation, and sequence risk are excluded.
Before you use the result
Is this Berkshire Hathaway’s portfolio?
No. It models a trust instruction described in the 2013 shareholder letter.
Does the calculator use actual S&P 500 returns?
No. You control both return assumptions.
The next question this page cannot answer
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Calculator Rebalancing calculator The letter states the split and not the maintenance. This prices what holding the 90/10 through a drawdown actually requires.
Open → -
Calculator Sequence of returns risk calculator The specific risk a 90% equity retirement allocation carries: a bad first decade withdrawn against and never recovered.
Open → - Guide The 4% rule was never a rule, and it was never really about 4%
The spending rule the 90/10 is usually paired with, and the research that set its number.
Open →
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