Snowball Effect 2.0

You were a bit shaken after reading Snowball effect 1.0! Understandable. Compounding is the 8th wonder of the world, and being so it should make you "Wow" at least a little bit.

But now let’s get practical and let’s push this compounding story to the next level.

There is a nice law in nature that says you can double up your return on the investment in 10 years if you invest at 7.2% per year.

This means that if you have $15,000 and you invest them every year at 7.2%, in 10 years’ time you will have $30,000 cash in your bank account. Celebrate.

This is without you moving a finger.

Ok, you want more, cool. You can do better. If you are good enough to be able to invest at 10% per annum, you will have $30,000 just after 7.2 years. Or almost 3 years earlier.

Correct, you double your money faster by increasing your yearly return.

Then if you are really good and you are able to invest at 15%, you will double your money in just 5 years, that is half the amount it took in the first case.

You see. Now you have mastered compounding and the magic underneath this concept.

It is time to practice it in real life.