I started serious Investing Journey in Jan 2000 to create wealth through long-term investing and short-term trading; but as from April 2013 my Journey in Investing has changed to create Retirement Income for Life till 85 years old in 2041 for two persons over market cycles of Bull and Bear.

Since 2017 after retiring from full-time job as employee; I am moving towards Investing Nirvana - Freehold Investment Income for Life investing strategy where 100% of investment income from portfolio investment is cashed out to support household expenses i.e. not a single cent of re-investing!

It is 57% (2017 to Aug 2022) to the Land of Investing Nirvana - Freehold Income for Life!

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Sunday, 20 January 2019

Compound Interest is not the same as Compound Returns (4)


Read? Compound Interest is not the same as Compound Returns (3)
Every time when Uncle8888 read something similar like this in the cyber world .. he smiles!

 "However, many forget the power of compounding when it comes to investing, helping you achieve financial freedom at an earlier age. Enjoy your retirement, start investing today!"

 Some folks need to learn from Crash Got Sound that compounding investment return is NEVER the same as compounding interest as savers!

 Albert Einstein reportedly said it. “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.”

Posted by Createwealth8888 at 20:52
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6 comments:

  1. Spur21 January 2019 at 11:49:00 GMT+8

    Hi Uncle8888,

    People forget that compounding market returns is after many years of both ups and DOWNS, and with consistent RE-INVESTING of dividends. ;)

    When SGX recently ownself praise ownself about STI having better total 10-yr returns (CAGR of 9.2%) than Hong Kong and China .... I wonder how many people enjoyed that compounding returns? :)

    Even if lucky enough to start at the trough of the GFC in early 2009, many would have sold in the big corrections in 2011 or 2015.

    Many who started before GFC will have quickly sold off in 2013-2014 after "breakeven".

    Even for those who stayed in from 2009 till today, many will not have re-invested their dividends, and thus probably not achieving that 9.2% ;)

    ReplyDelete
    Replies
    1. CreateWealth888821 January 2019 at 12:09:00 GMT+8

      So easy to praise ownself on theoretical investment return.

      Delete
  2. CreateWealth888821 January 2019 at 16:08:00 GMT+8

    It is yearly interest like FD

    ReplyDelete
    Replies
    1. CreateWealth888821 January 2019 at 17:32:00 GMT+8

      Walau. It is yearly compound like you renew FD with capital and interests together as new capital.

      Delete
  3. Spur21 January 2019 at 18:52:00 GMT+8

    CPF website long time ago already say: interest computed monthly, credited & compounded annually.

    Sorry, no monthly compounding LOL!

    Of course we all want daily or hourly compounding! Kekeke!!!

    ReplyDelete
  4. CreateWealth888821 January 2019 at 19:42:00 GMT+8

    Daily compounding we no need to invest. Every month top up cpf

    ReplyDelete

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