Do you think like the richest man in the world?

by admin on June 11, 2011

Did you know the worlds most successful investor Warren Buffet made his fortune through compounding his returns?

He has been one of the richest men in the world for many years. He has been number 1 on a few occasions too,.

He has averaged around 24% per year for over four decades. 24% per year compounded for 40 years would turn $1,000 into $5,455,000.

I know what your thinking. Maybe you cannot make 24% per year or maybe you don’t want to keep your money locked away for 40 years.

I know I don’t want to lock away money for 40 years, I mean let’s be honest, I could be dead by then!

Let’s say we only earn 15% per year. The table below shows how a $1,000 investment could grow:

Years Value
1000
1 1150
2 1322.5
3 1520.88
4 1749.01
5 2011.36
6 2313.06
7 2660.02
8 3059.02
9 3517.88
10 4045.56
11 4652.39
12 5350.25
13 6152.79
14 7075.71
15 8137.06
16 9357.62
17 10761.26
18 12375.45
19 14231.77
20 16366.54
21 18821.52
22 21644.75
23 24891.46
24 28625.18
25 32918.95
26 37856.8
27 43535.31
28 50065.61
29 57575.45
30 66211.77
31 76143.54
32 87565.07
33 100699.83
34 115804.8
35 133175.52
36 153151.85
37 176124.63
38 202543.32
39 232924.82
40 267863.55

As you can see, at just 15% per year, your investment value doubles in less than 5 years.

Compounding is a very important part of making money grow significantly over time.

15% per year is relatively easy to obtain for many good stock traders.

Leave a Comment

Previous post:

Next post: