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Understand the power of compounding returns from "summary" of Guide to Investing by Robert T. Kiyosaki
The concept of understanding the power of compounding returns is crucial in the world of investing. This idea revolves around the simple principle that when you earn a return on an investment, and then reinvest those returns to earn even more, your money grows exponentially over time. Imagine you invest $1,000 in a stock that earns a 10% return in the first year. At the end of the year, you would have $1,100. If you leave that money untouched and it continues to earn a 10% return each year, at the end of the second year, you would have $1,210. The return is not just on your initial $1,000 investment but also on the $100 earned in the fi...
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