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They say a dog is man's best friend. We can't argue against that considering the fact that dogs constantly give us love and companionship without ever once complaining. There is, however, one thing that a dog can never give us...that thing is MONEY!
Let's explain. Compounding, which is actually a simple concept, is one of the most powerful assets when it comes to building wealth. Albert Einstein referred to it as one of the most amazing things that mankind has come up with. So what exactly is it?
Compounding is basically earning money on your past earnings. For example, let's say you invested $1,000 this past year and earned a 10% return. You now have $1,100 which means you earned $100 from your original investment. Now let's assume you earned a 10% return again this year. That means you now have $1,210. You earned $110 this year which is $10 more than you earned last year even though you had the same percent return.
In addition to this, you have $210 that you didn't have 2 years ago because your original investment has been compounding all this time!
You may be thinking "so what. $10 isn't going to make me rich!". The fact is that the true power of compounding doesn't appear for quite a number of years. Compounding is not going to affect you if you're only going to invest for 2 or 3 years.
The power of compounding is noticeable when you start getting out 10,20, and 30+ years. The effect of compounding is worth the wait because when it hits, it hits like a tidal wave! The great thing is that the tidal wave is made of cash. Cold Hard Cash!
As a Buck Investor, you'll easily reap the rewards of compounding. To give you an idea of what compounding can actually do, let's take a look at the following example:
The Millionaire Dish Washer
And just like a dog may be man's best friend, compounding is by far the investor's best friend!
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