Realizing Goals
Compounding is often the reason investment and trading goals are realized. Albert Einstein referred to the power of compounding as the 8th wonder of the world. In a recent article, I addressed the dynamic of accumulation and compounding. Together, these two practices form a synergy.
One of the most important aspects to remember is that compounding requires time. The longer the time, the greater the effect. Essentially, compounding rewards patience and dedication. Investors and traders living by these two key factors can usually attest to the power of compounding.
Once the dynamic is in motion, it takes on a life of its own, ultimately creating new and additional value. This value appears to come out of nowhere. However, that’s the power of compounding. It’s almost a mystical force that has the power to create. Compounding is, in fact, way more powerful than many realize.
A Trader’s Companion
Trading strategies often include a set return per day, week, or month. By adhering to the prerequisites laid out in the plan, a trader can build their investment or trading capital. By securing a specific return and then adding that return to the trading capital, a trader can increase their capital and ultimately, their returns.
For example, a trader who begins their journey with $5000 and secures 0.5% per day over many years can realize unimaginable returns. The initial capital of $5000 compounds to $1.1 million over three years. That’s enormous, and sounds impossible. However, that’s the power of consistency and compounding.
At first glance, it seems impossible. However, securing a return of 0.5% per day and then snowballing those returns will yield a harvest of a significant proportion. The key, of course, is to ensure daily gains and then put them to work. Being disciplined and effective is crucial.
Final Thoughts
Don’t underestimate the power of compounding, especially if you are a long-term investor. By simply applying the eighth wonder of the world, your investment journey could become a lot more profitable than you previously envisioned. All the best, see you next time!
Disclaimer
First of all, I am not a financial advisor. All information provided on this website is strictly my own opinion and not financial advice. I do make use of affiliate links. Purchasing or interacting with any third-party company could result in my receiving a commission. In some instances, utilizing an affiliate link can also result in a bonus or discount.
This article was first published on Sapphire Crypto.
Posted Using INLEO