šŸŖ™ The power of compound interest - Deepstash
šŸŖ™ The power of compound interest

šŸŖ™ The power of compound interest

Curated from: wealthoperators.substack.com

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ALBERT EINSTEIN

"Compound interest is the eighth wonder of the world. He who understands it, earns it."

ALBERT EINSTEIN

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The Power of Compound Interest

The Power of Compound Interest

Compound interest helps you earn interest on the money that you originally invested.

And the key is that you're earning interest on your interest.

Here's an example...

If I offered you:

1: One million dollars right now...

Or:

2: One penny right now and I'd double it every day for 30 days...

Which option would you choose?

Most people would go with option 1.

But if you went with option 2, you'd get over five million dollars.

Check it out:

50+ FREE RESOURCES about money, investing & Personal Finance for you (its FREE)

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The Power Of Compound

As you can see...

If you start with a penny, and double it every day for 30 days...

You will end up with $5,368,709.12.

THIS is the power of compound interest.

It's a great example of how small amounts of money can grow into large sums over time.

The key?

The earlier you start investing...

And let compound interest do its magic...

The more powerful the effect becomes.

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How to Use Compound Interest to Build Wealth

Now you know how powerful compound interest is.

But how can you "earn it" as Einstein said?

By investing money into appreciating assets.

Here are 7 assets that can earn you compound interest:

  1. Real Estate
  2. Fine Art
  3. Stocks
  4. Crypto
  5. HYSA
  6. Farmland
  7. Yourself

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1. Real Estate

90% of all millionaires become so through owning real estate.

Real estate can provide:

  • Tax advantages
  • Passive income from rent
  • Profits from property appreciation

Remember, real estate is illiquid and a long-term investment.

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2. Fine Art

The average ROI for fine art is 10.6% per year.

Fine art investments can provide:

  • Diversification
  • Inflation protection
  • Long-term value appreciation

Remember, fine art can be expensive and a long-term investment.

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3. Stocks

The main source of wealth creation is...

Investing in stocks.

Stocks can provide:

  • High returns
  • Protection against inflation
  • Passive income from dividends

Investing in stocks is a proven way to earn compound interest.

Remember: Stock markets fluctuate and past performance doesn't guarantee future results.

Start with index funds if you're new to investing.

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4. Crypto

There are over 88,200 crypto millionaires worldwide.

Crypto can provide:

  • High returns
  • Diversification
  • Inflation protection

Important: Crypto is highly volatile.

Never invest more than you can afford to lose.

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6. Farmland

Farmland has averaged ~11% total annual returns from 1992 to 2023.

Farmland can provide:

  • Stable returns
  • Passive income from rent
  • Protection against inflation

Remember, farmland is illiquid and a long-term investment.

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7. Yourself

You can't go wrong with investing in yourself.

The return you’ll get will be 10X the amount of money that you invested.

How do you invest in yourself?

  • Read books
  • Take courses
  • Listen to podcasts

The more you learn, the more you earn.

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The Bottom Line

Compound interest is the way to wealth.

If you want to become a millionaire...

Start investing early and often.

And let compound interest work its magic.

Your bank account will thank you later.

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CURATOR'S NOTE

If you want to become a millionaire... You need to understand compound interest.

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