Why so many people seek to double or triple their money in no time? First, it’s the thrill of doing it. And perhaps bragging about it to friends and family. Another reason could be that people don’t really understand the power of compounding. As we explored in an earlier post, … [Read more...] about Seeking instant wealth? Don’t!
Complete List of Blog Posts
When we invest, we dream of making it big and making it quick. We all have read overnight millionaire stories in the media. Doubling our money every year or even every two years is our ultimate goal. Getting a return of 10-20% each year sounds very pedestrian and unsatisfactory. … [Read more...] about Don’t be dismissive of low returns
The magic of compounding only bears fruit if you reinvest all the earnings back into it. Let your money run as long as you can. If you take it out too soon – either to spend it or move it to cash – you won’t get the full benefit of compounding. This is best seen by an example … [Read more...] about Reinvesting is key
Compounding is very powerful phenomenon if done over a long period of time. But it is also widely misunderstood. Compounding in our money savings context is simply how we allow any interim returns on our money be reinvested with the original principal. Consider a bank that … [Read more...] about How does money compound over time?
When you buy corporate bonds, you are told how much interest you will get and for how long. Your expected returns are spelled out by the company issuing the bonds. If you hold these bonds until they mature, you will get your initial investment back. There are risks, of course. … [Read more...] about When stocks turn into perpetual bonds
As you can see from the pie chart, about two-third of my portfolio is invested in stocks. Mostly in either individual stocks or stock index funds. I have some real-estate investments but they are about one-sixth of the portfolio. I keep some cash for my near-term needs and the … [Read more...] about What my portfolio contains today?