Understand the power of compounding returns over time from "summary" of The Coffeehouse Investor by Bill Schultheis
Imagine you are standing in front of a massive oak tree. It's been there for centuries, growing steadily year after year. As you gaze up at its towering branches, you can't help but marvel at the sheer power of compounding growth. This tree didn't shoot up overnight; it took time for it to grow to its current majestic state. In the same way, compounding returns have the potential to grow your investments steadily over time. When you invest your money wisely and leave it to grow, the returns on your investments can start to earn returns of their own. This snowball effect is what makes compounding returns so powerful. As each year passes, your initial investment grows not just by a fixed amount, but by a percentage of the total amount, including...
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