Some people think this is “stupid” but in fact it can be achieved through investment and financial management.
Famous billionaires like Warren Buffett, financial tycoon Soros and others are investment professionals and financial managers. The secret to their success is only one: using money to generate money, is also an important concept spoken today: compound interest.
So what is compound interest? How is compound interest calculated?
Compound interest is the interest amount not only calculated on the principal amount but also on the amount of interest due to the principal generated. It is the interest calculated on interest or the interest rate. The concept of compound interest is important because it is used to solve many problems in finance. According to this calculation, the amount of each stage of the original capital is different when calculating. The compound interest formula is S = P (1 + i) ^ n.
MISPERCEPTION OF “COMPOUND INTEREST”
When it comes to compounding many small partners, they don’t really know compound interest is considered an investment product. In fact, compound interest is only a method of calculating gross profit. This method may be due to the nature of the product or the investor itself, which is also the concern of investors for the product. Investors will actively invest interest plus principal and then invest.
CONCERNING “COMPOUND INTEREST”, IT IS IMPOSSIBLE NOT TO MENTION “RULE OF 72”
The “72 Rule” implies a concept of compound interest, meaning that after an investment, the principal and interest of each period becomes the principal of the next investment. If accumulated, after a time there will be a double amount of the original amount. Taking 72 divided by the annual interest rate will take the time it takes to double the asset. In other words, if the property doubles in 10 years, the annual interest rate will need to reach 72: 10 = 7.2.
Of course, it takes a long process to get rich by compounding, just like reading books, you can’t just read one or two books that can understand the world. But reading all 300 volumes, 500 volumes, it was different, at that time the 3 senses were a unified body and had their own understanding of society and the world.
This also implies the law of 10,000 hours.
A friend beside me likes slowness, he says that he doesn’t have smart brains, superior abilities, so I can still choose a big circle to run faster than others. Investment, for example, within 10 years, each year compounding interest will change to 8%, 10%, 15%, I don’t know how much it will last but I think 20 years later I will be richer than many people .
Einstein once said that compound interest is the eighth wonder of the world. When your economic situation allows, the value of your investment time will add value to your capital, and this added value does not require any hard work.
Buffett started saving at age 6, saving three hundred thousand a month. At the age of 13, he had 3 billion and bought the first stock. Since then, he has focused on saving and investing. But before he was 50 years old, he could only say he was a rich man. After age 60, he became the richest person in the world. So long life can enjoy more and more benefits of dual life.
There are many things that can generate interest in life like money, energy, health, etc.
Life is a race, on the track there will be a lot of people left behind for many different reasons, because so many people are not ready to go ahead for a long time in such a long time. .
It’s like the story: two poor boys climb the mountain pass over thousands of miles and finally find a rich messenger in a remote place. The envoys saw that they all had a kind heart and strong perseverance in pursuing wealth, and they gave each one a seed of wealth – a fruit seed.
A young man took the seed and planted it, regularly fertilizing, watering and cleaning the grass. Not long after that, the land grew a young green tree. The next year the trees became dense, the branches were full of bad fruits. The boy sold fruit to save money to buy many seedlings to expand the orchard. Before long, the boy had a large orchard and became a famous, wealthy person.
The other boy brought those seeds to cook and had a good meal. After that, the boy waited for the rich messenger to distribute him wealth, waiting for that until the first silver, the boy was still poor and poor. He had ten parts that he did not understand and thought that the rich messenger had lied to him, and he had gone over the thousands to meet the messenger to ask. The rich messenger smiled and did not answer, only guided him to the boy to see. When he saw the garden, he suddenly realized and awakened.
In fact, every seed can grow into a beautiful garden. From now on, cherish every coin, consider it a money seed and carefully seed money in the soil and you will harvest a beautiful garden of wealth.
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