The Three Variables

There are 3 basic variables in the Compounding equation. The more you have of any one of them, the higher the end result will be.Time The longer you invest a certain capital amount, the higher the end result will be. Starting Capital Money can bring in more money. That is, if it is wisely invested. This is why the (wisest) rich keep getting richer. The larger the amount you start with, the higher the end result will be. If you do not have a large amount to start with, then you definitely can afford small savings on a monthly basis. Rate of Return Choose a business that will give you the highest return possible, while not incurring a higher risk that you can tolerate. What this means for the average investor (most of us) who cannot afford a large amount of capital, is to regularly develop the discipline of saving on a regular basis, and select the highest return rate possible. This sounds logical, but you will be amazed how few are those who follow this very common sense advice. Another fault is if you keep investing for a long term goal and the money multiplies, and you do not wait till the very end, but rather cut short the investment and spend the money on some fancy thing.

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