Compounding as a way of building wealth and value
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Re: Compounding as a way of building wealth and value
#2If someone can tell me how to make 40% annually consistently for 42 years, I'm happy to put in $1k and wait
Re: Compounding as a way of building wealth and value
#3I recall the expected rate of return on investments (measured over decades) to be closer to 5% than 40%. Nonetheless, compounding does work - it just takes a little more capital and a little longer.
Re: Compounding as a way of building wealth and value
#4Yeah the problem is there is no single investment that will happily grow 40% a year and reward you for doing nothing. At that rate of risk, expect any of a number of things to happen before Year 42:
- You get scammed/cheated
- Company goes bankrupt
- Fund goes bankrupt/fails
- The currency one invested in fails to keep up
- You need the money (life isn't perfect, and a few million dollars at year 20 can solve a lot of problems)
- You stop being greedy and are happy with the cumulative returns