As from April 2013 my Journey in Investing is to create Retirement Income for Life till 80 years old for two over market cycles of Bull and Bear.

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This blog is authored by an old multi-bagger blue chips stock picker uncle from HDB heartland!

"The market is not your mother. It consists of tough men and women who look for ways to take money away from you instead of pouring milk into your mouth." - Dr. Alexander Elder

"For the things we have to learn before we can do them, we learn by doing them." - Aristotle

It is here where I share with you how I did it! FREE Education in stock market wisdom.

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Value Investing
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Saturday, 20 June 2015

Compounding: What Other Financial and Investment Bloggers Seldom Mention it!!!



For the younger ones, do you fully understand the power of compounding?



Now, open your eyes wide and see closely and very careful. 

What did you see on Right, and on the Left, and back to the Right

Close your eyes. Open wide and focus on the Right side again. 


Think deeply!


What did you understand about compounding?


You may like to answer in your own free-form!




 




12 comments:

  1. Some will get it. Some dont. It is the difference in values. You have a whole new generation looking to make a app and be rich.

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  2. Invest and reinvest to me its not exactly compounding.
    Cpf interest is really compunding. The only prob is the policy changes suka suka till i dunno whose money alrdy

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  3. This comment has been removed by the author.

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  4. Compounding outside of CPF takes tremendous discipline comprises of consistency, persistency and patience.

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    Replies
    1. The period to invest our CPF fund is short. Just that few months of exposure to the bear market..

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  5. Unfortunately our human brain is not made to easily understand the exponential function (= compounding). We are lazy and prefer to think in linear terms.
    As such the Ninth Wonder of the World can only be understood once you punch a few numbers into a financial spreadsheet and fast forward 30+ years.
    I recently asked a group of Principle of Accounts-Teachers whether they believe that saving 1 Dollar a day can make you a millionaire in your lifetime. Most stared at me with open mouths. In fact one can achieve that feat.
    It just takes about 70 years (which is fairly well within an average lifetime) and an annual return of 8% (historically a broad based stock market investment can achieve that).

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    Replies
    1. May be some people can visualize it better.

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    2. I agree your visualization is great.
      And once people punch their numbers into a spreadsheet and plot a chart one would say that everybody should get it.
      Dinkytown has great calculators including visualization: https://www.dinkytown.net/

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    3. Thanks for your wealth of experience and the tools you share with us. Kind Regards

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  6. The "simplest thing" for me is to try my best not to get into debt if possible or unnecessary and live below my means. Invest in SGX stock market for a lifetime, invest, invest....... nah never really think hard on compounding my money. It seems my money just compound by itself.... i think i am in "lost horizon" as far as planning to compound my money.
    i still think i just barely scrap by as i still can't stop investing my money. Nothing can teach you better than your own ways of doing it.

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