Options Trading Profits
Momentum Strategies that Build your Wealth

Friday, April 22, 2005

The power of compounding

 

The greatest mathematical discovery of all time.
- Albert Einstein


What is so great about compounding in investing?

Basically it is a process of generating profits on an
asset's reinvested earnings.

I call it the "investment accelerator".
It requires 2 ingredients to work :

- time
- reinvested earnings

Let's look at an example, shall we?

You have $10,000 to invest, and found an investment
that will give you 5% return per year.
(Nothing great but just for demonstration purposes)

In one year, you will have $10,500. Now let's say
that you keep the total investment for another year,
your investment will grow by $1,025 from your
original investment to $11,025!

In 5 years and 10 years, you will have $12,762.82
and $16,288.95 respectively.

All this is done without you even have to lift a
finger. It'll continue as long as you keep re-investing
and earning interest.

If you want to "magnify" those numbers, you can either
add more capital or give in more time. You get the
point.

Now, I got a question for you.

When do you want to start investing in order to
see the magic of compounding and make more money?

Today? You can't wait, can you? :)

Time can be your friend or foe. I'll let you decide.

The next thing we need to cover is the plan.
Plan that you'll use to convert your dreams into reality.

Signing off for now...

Go for profit$!

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