Compounding is the eight wonder of the world. Those who understand it, earn it. Those who don’t pay it. Learn everything you need to know about the power of compounding in this article.
CQ, my son turns 16 at the end of the month. Recently, he started to express great interest in investing, the economy, how to start and run a business and so on.
This marvelous article would be a great motivation for my boy to continue reading and learning. I keep telling him that his greatest advantage is to be able to start saving and investing at an early age. Time will be on his side, if he grows to be a man of patience and shrewdness.
I agree with you that returns won't be as high over the next decade as they were in the past decade.
However, it is very important that you keep investing. In the long term stock prices will always follow the evolution of the intrinsic value. If you buy great companies with capable management which can grow their FCF per share with more than 10% per year at a fair price, you'll end up fine.
First of all a Thank You for such an easy and understandable article! When you are talking about investing in compound interests, are you making allusion to financial instruments, or talking about saving account that give you compound interest ( I would be interested in such a thing :D) ?
Compound interest works for all investments: your savings account, real estate, bonds, stocks, ... This newsletter and article is mainly focused on stocks as this asset class offers you the highest return in the long term.
CQ, my son turns 16 at the end of the month. Recently, he started to express great interest in investing, the economy, how to start and run a business and so on.
This marvelous article would be a great motivation for my boy to continue reading and learning. I keep telling him that his greatest advantage is to be able to start saving and investing at an early age. Time will be on his side, if he grows to be a man of patience and shrewdness.
Thank you and have a great Easter!
The fact that he's interested in investing is a great sign!
The sooner he starts, the better. He'll do great!
Thanks! Was really helpful
It's an honor to be able to help you!
Good article, reality is you won’t receive anymore than 5% compound interest in this decade, and if you do the interest wont buy a rotten apple
I agree with you that returns won't be as high over the next decade as they were in the past decade.
However, it is very important that you keep investing. In the long term stock prices will always follow the evolution of the intrinsic value. If you buy great companies with capable management which can grow their FCF per share with more than 10% per year at a fair price, you'll end up fine.
First of all a Thank You for such an easy and understandable article! When you are talking about investing in compound interests, are you making allusion to financial instruments, or talking about saving account that give you compound interest ( I would be interested in such a thing :D) ?
Hi Mimi,
Compound interest works for all investments: your savings account, real estate, bonds, stocks, ... This newsletter and article is mainly focused on stocks as this asset class offers you the highest return in the long term.