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.”
Hi Uncle8888,
ReplyDeletePeople 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% ;)
So easy to praise ownself on theoretical investment return.
DeleteIt is yearly interest like FD
ReplyDeleteWalau. It is yearly compound like you renew FD with capital and interests together as new capital.
DeleteCPF website long time ago already say: interest computed monthly, credited & compounded annually.
ReplyDeleteSorry, no monthly compounding LOL!
Of course we all want daily or hourly compounding! Kekeke!!!
Daily compounding we no need to invest. Every month top up cpf
ReplyDelete