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Money And The Power Of Compounding
Everyone wants to make more money, but even more than that, everyone wants to watch the money that they've already earned grow without any extra work. The best way to do this is by compounding your money. Albert Einstein once called compounding the greatest mathematical discovery of all time. It has also been named the royal road to all riches.
While everything involving investing might seem complicated to some, compounding is the easiest form of investment. It is safe and everyone can do it. Compounding is simply reinvesting your profits rather than spending them. This allows you to earn interest on your reinvested profits as well as your original investment.
In order to compound successfully, there are 3 things that you need to do :
1. Since it takes so long to produce a significant profit, it is necessary to start early. Compounding is a great way to take a small amount of money that you make when you are young and turn it into a great mountain of cash to have when you are old. So don't wait!
2. Maintain perseverance and discipline. This is necessary in order to keep yourself on the right savings and investment path. The hardest part of compounding is just making the scheduled payments.
3. Finally, in order for compounding to be successful, don't touch the money. You must not withdraw any of it until your set goal is reached.
The results you'd get following this discipline are amazing. Say you start with nothing, but decide to put $500 of your income into an investment account every month, and you commit to letting your money ride. That means you can't withdraw any funds until you've reached your long-term goal. The overall market, at least as measured by the S&P 500 index, returned 11.8%, on average, annually over the past 10 years. If you achieve that same return, you'd have $114,000 after 10 years. But it gets better. You'll have $486,000 if you stick with the plan for 20 years and a cool $1.7 million in 30 years.
Compounding involves sacrifice. You might feel like you are sacrificing your invested profits since you are reinvesting them rather than spending them, but it is important to remember that after some time, you will not feel that you've made any sacrifices.
In the beginning, compounding can be boring. Just wait about seven or eight years though - your money will start to pour in and you won't be so bored anymore!
TheSUBWAY: Small Cap Stock Promoters
(http://www.TheSUBWAY.com)
The SUBWAY has established a national reputation for providing investor relations services. We are a full service firm and work with you through each stage of the investor relations process. Risk Tolerant Investors, Public Corporations, Promoters : We have the best of all three worlds. The one source for High Risk High Return Education and Information. Public Corporations who are profiled on TheSUBWAY have had a great history of realizing the benefits of increased exposure in the marketplace.
Visit our Forum at (http://www.thesubway.com/small-cap-forum) to comment on small cap stocks, ask questions and talk with other investors.
You can also visit our Blog to read more, comment, and/or ask questions about Stock Promoters at (http://stockpromoters.wordpress.com)
Submitted by Christine at NewSunSEO.com
Article Source: http://EzineArticles.com/?expert=Christine_Abbate
Money And The Power Of Compounding
Everyone wants to make more money, but even more than that, everyone wants to watch the money that they've already earned grow without any extra work. The best way to do this is by compounding your money. Albert Einstein once called compounding the greatest mathematical discovery of all time. It has also been named the royal road to all riches.
While everything involving investing might seem complicated to some, compounding is the easiest form of investment. It is safe and everyone can do it. Compounding is simply reinvesting your profits rather than spending them. This allows you to earn interest on your reinvested profits as well as your original investment.
In order to compound successfully, there are 3 things that you need to do :
1. Since it takes so long to produce a significant profit, it is necessary to start early. Compounding is a great way to take a small amount of money that you make when you are young and turn it into a great mountain of cash to have when you are old. So don't wait!
2. Maintain perseverance and discipline. This is necessary in order to keep yourself on the right savings and investment path. The hardest part of compounding is just making the scheduled payments.
3. Finally, in order for compounding to be successful, don't touch the money. You must not withdraw any of it until your set goal is reached.
The results you'd get following this discipline are amazing. Say you start with nothing, but decide to put $500 of your income into an investment account every month, and you commit to letting your money ride. That means you can't withdraw any funds until you've reached your long-term goal. The overall market, at least as measured by the S&P 500 index, returned 11.8%, on average, annually over the past 10 years. If you achieve that same return, you'd have $114,000 after 10 years. But it gets better. You'll have $486,000 if you stick with the plan for 20 years and a cool $1.7 million in 30 years.
Compounding involves sacrifice. You might feel like you are sacrificing your invested profits since you are reinvesting them rather than spending them, but it is important to remember that after some time, you will not feel that you've made any sacrifices.
In the beginning, compounding can be boring. Just wait about seven or eight years though - your money will start to pour in and you won't be so bored anymore!
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TheSUBWAY: Small Cap Stock Promoters The SUBWAY has established a national reputation for providing investor relations services. We are a full service firm and work with you through each stage of the investor relations process. Risk Tolerant Investors, Public Corporations, Promoters : We have the best of all three worlds. The one source for High Risk High Return Education and Information. Public Corporations who are profiled on TheSUBWAY have had a great history of realizing the benefits of increased exposure in the marketplace. Visit our Forum at (http://www.thesubway.com/small-cap-forum) to comment on small cap stocks, ask questions and talk with other investors. You can also visit our Blog to read more, comment, and/or ask questions about Stock Promoters at (http://stockpromoters.wordpress.com) Submitted by Christine at NewSunSEO.com Article Source: http://EzineArticles.com/?expert=Christine_Abbate |
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