The Law of Compounding applies to everyone… and is always working.

Law of compounding

💡 “The Law of Compounding interest is the eighth wonder of the world.

He who understands it, earns it… he who doesn’t… pays it.”

 

Albert Einstein

Albert Einstein called compounding the eighth wonder of the world. The Law of Compounding means earning interest on interest.

“It’s the principle of reaping huge rewards from a series of small, considered choices. Success is earned in the moment to moment decisions that in themselves make no visible difference whatsoever, but the accumulated compounding effect is profound.

 

The payoff of the compound effect …

In order for the law of compound effect to work, you need to be patient. Most of these daily changes won’t provide immediate results. If you want to save money so you can enjoy your retirement, consider the compounding effect of time.

 

💡 See How The Law of Compounding Works

If you were offered two options of receiving $3 million or receiving one cent doubling every day in a given month, which option would you choose?

You might be tempted to go for the $3 million which would be true right up to day 29 with the one cent doubling every day reaching a balance of approximately $2.7 million.

On day 30 though you would pull right past with a balance of approximately $5.3 million.

But on day 31, did you know you would end up with a massive $10,737,418.24! That’s more than three times the $3 million offered on day one! The eighth natural wonder of the world – the law of compounding.

 

What stands between you and your goal is your decisions.

If you want to improve your financial life, (and your life in general) it depends on your decisions. The most important element in making good decisions is making conscious decisions. This is when you actually consider the pros and cons of your decisions before making them.

If you float through life making decisions on the fly, with little if any thought, people often find themselves wondering why they aren’t happy, healthy, wealthy or successful.

 

For more information on how you can use the Law of Compounding in your financial strategy, contact us at FMGWS.com.au.

💪 Getting started with budget goals isn’t easy, but we’re here to help.
For more ideas on investing, contact us here. And if you need help to develop good money habits and growing investments, we ‘design your path’ to help you get ahead financially.

 

Action is your power! 💥

You are only as good as your last action, and your actions will be revealed to you by the results you see in your life. Make your actions count in both how to save for investing and ultimately building your wealth.

Your commitment is your responsibility, and your success in life depends on your actions and your commitment. So, enjoy the journey, embrace your challenges, invest hard and live your dreams.

 

If you need help and this article has inspired you to take action, contact us and allow us to assist you on your wealth building journey.

Call us on 08 7111 0022 or book a chat here.
Make the rest of your life the best of your life
.

 

 

P.S. What is compound interest?
It is the interest you earn on both the money you’ve saved and the interest you earn on the interest itself. As both forms of interest grow, it begins accumulating more rapidly and in time starts building at an exponential pace. Read more here in our guide to successful investing.

 

 

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Disclaimer: This article is information only. It is not intended to imply any recommendation about any financial product(s) or to constitute financial or tax advice. The information in the article is reliable at the time of distribution, but may not be complete or accurate in the future.

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