Compound Interest
-Compound Interest-
The Eighth Wonder of the World
What is Compound Interest
Compound Interest is The method of calculating interest is that in addition to the interest being calculated based on the principal, the newly obtained interest can also accrue interest, which is commonly known as interest compounding.
The formula of compound interest: income = principal * (1 + interest rate)^N
As time N grows, the effect of compound interest will be obvious, especially if it extends to more than 30 years , the difference between compound interest and simple interest will be incredible. This is the power of compound interest.
Compound interest in investment
In investment, compound interest means that every time you earn money, you do not withdraw it in cash, but you reinvest it and let the money make money. For example, investing in shops, real estate, stocks, bonds, and even gold all involve using money to make money.
Warren Buffett has a famous saying: "Life is like a snowball. The important thing is to find very wet snow and a long slope." Very wet snow = high yield, long slope = long time . The combination of very wet snow and a long slope can turn into a huge snowball. He used the metaphor of a snowball to realize huge wealth under the long-term effect of compound interest.
In reality, almost no one can accelerate the growth of compound interest through short-term violence. We ordinary investors should continue to improve their knowledge, maintain stable and sustained returns, make long-term investments, and make time. Friends, feel the power of compound interest.
In addition to financial investment, in life, we should all develop a compound interest mindset to improve all aspects of our personal growth.
As long as you take action today and move 0.01 further than you did yesterday, the gap between you and ordinary people who have stopped moving forward in 365 days will be 37.8 times! !R
From Memorize 10 words every day, exercise for 20 minutes, read for 30 minutes, and learn 1 financial knowledge....Start, and over time, let excellence become a habit!