Understanding the Power of Compounding in Wealth Building

[Nomad]

The goal of investing is to generate returns. These returns can either be spent or reinvested. Reinvesting leads to compounding, where earnings generate additional earnings. This cycle helps wealth grow significantly. Withdrawing profits stops the investment from expanding. Therefore, if you want to grow your wealth, you need to reinvest and compound your investment

 

[King Belieal]

Compounding your wealth turns your little set asides to become like an oceanic wealth in the future.

 

[Springtime]

Can't agree more. I am not putting a portion of my earnings to a fixed deposit account every month. I have done this for many years. I have not withdrawn any money from this account. Due to compounding effect, the amount of money has accumulated quite significantly.

 

[Suba]

Compounding is not only applied in investment but also applied in running a business, we need to make retained earnings for business expansion purposes. But you will have difficulty if you invest in buildings and land, capital gains do not occur before you make a sales transaction, unless you get from rental income and you can invest funds in stocks or others.

 

[Augusta]

I agree with you compounding helps wealth grow significantly. Withdrawing profits stops the investment from expanding.

 

[Min George]

Anyone that is able to compound very well is surely going to achieve wealth much quicker and much more intentionally.

 

[Fidelia]

I have seen compounding work very well for me as I have used it to expand my business and investment portfolios.