Jun 8, 2023
FIEGI Report – David Booth “Let the Compounding Commence”
Written By: Ryan Fiegi
Happy graduation season everyone! Hopefully, you all have friends and family members that are celebrating the amazing accomplishment of graduating, all the way from kindergarten through Med School. This week’s article pays homage to all graduates and reminds us how important lifelong compounding can be. Enjoy!
Let the Compounding Commence (4-min article)
Summary: Compounding is the process by which the value of an investment increases over time as earnings or interest are reinvested. It’s the snowball effect but with money. Example:
- You have $35,000 now (age 25). You earn an average 10% annualized return (close to long-term historical US market averages). You will have $4,108,680 after 50 years (age 75).
Life is full of surprises, and many of them can come from how your decisions compound over decades. So, start rolling your snowball, both in life and in investing. Let the compounding commence!
“Success leads to success. But here’s something that may surprise you. The size of the success doesn’t seem to matter very much. When you feel successful at something, even if it’s tiny, your confidence grows quickly, and your motivation increases to do that habit again and perform related behaviors. I call this success momentum.”
– BJ Fogg (Author of Tiny Habits)