Warren Buffett is widely recognized as one of the greatest investors of all-time because of his discipline and conservative approach to investing.

Instead of focusing on the short term, Warren Buffett focuses on the long term. He also has a low appetite for risk, buying companies that active traders would find boring beyond all belief.

Buffett once described his investment style as, "I'm 85% Benjamin Graham." (Benjamin Graham is known as the godfather of value investing. His book, The Intelligent Investor, is respected as a classic on Wall Street.).

Just look at Warren Buffett's company Berkshire Hathaway's (BRKA  ) stock price appreciation over the past 20 years. And yes, you are reading that correct, the stock currently trades for over $216,000... per share.

Berkshire currently holds a market cap of approximately $350 billion, making Warren Buffett the third richest person on the planet.

President Barack Obama and Warren Buffett in Oval Office
President Barack Obama and Warren Buffett in Oval Office

So what's the benefit of investing like Mr. Buffett?

 There are five key benefits of constructing a Warren Buffett portfolio:

1.You can sleep well knowing you are following the advice of the greatest investor of all-time, Warren Buffett.

2.By buying and holding for decades while reinvesting dividends, the power of compounded returns is realized.

3.With passive indexing in low cost index funds, you are keeping fees as low as humanly possible which maximizes returns.

4.You are maximizing tax efficiency by buying and holding for decades instead of days (only relevant when investing in a personal portfolio versus a retirement account).

5.The portfolio is easy to implement and straight-forward to follow.

Buffett, 85 years young, is widely quoted regarding his simple portfolio mentality. One of the most publicized moments of advice from Mr. Buffett came when Lebron James asked him what he should do with his own investments.

"My advice couldn't be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. I believe the long-term results from this policy will be superior to those attained by most investors - whether pension funds, institutions or individuals - who employ high-fee managers."

The big bet:

Warren believes so strongly in the simplicity of buying the S&P 500 that he bet a handful of hedge funds $1,000,000 that they couldn't outperform a low cost index fund over a 10 year period. Winner gets a donation to the charity of their choosing.

Warren Buffett chose the Vanguard 500 Index Fund Admiral Shares (VFIAX) for his single position. The competition Protege Partners, a New York City money management firm, selected five unnamed funds of hedge funds.

The bet was kicked off in 2008 and as of early 2016 Warren Buffett's bet was crushing the competition with a 65.7% return vs a 21.9% return for the hedge funds.

Bottom line:

Building a Warren Buffett portfolio is a lot easier than many people think because the best representation of Buffett's core beliefs falls under the S&P 500.

Buffett also believes in keeping costs as low as possible by consistently buying each month no matter what the market environment and then holding for decades. Also known as passive indexing, the other key is selecting funds with the lowest expense ratios.