Just like snowballing, snowballs stick more and more snow, becoming bigger and bigger, and bigger snowballs can stick more and more snow, and so on, snowballs will be unimaginable.
Just like the accumulation of wealth, when you have surplus funds, even if it is not much, as long as you can generate surplus, even if it is very low (for example, the rate of return is 5%), it will be a lot of money after repeated interest calculation.
A king in India wanted to reward the inventor of chess. The king asked him what he wanted. He said, "Your Majesty, please give me a grain of wheat in the first box, two in the second box, four in the third box, eight in the fourth box, and so on ..."
Hearing this, the king thought it was only a small reward and readily agreed.
As a result, you have to count to the sixty-fourth grid. Even if you bring all the food from India, the king can't keep his promise. Because according to the requirements of the Prime Minister, he wants all the wheat produced in the world in 2000.
This is the great value of compound interest.
Compound interest thinking can not only accumulate wealth, but also guide life. Those who persist in studying for decades, those who persist in exercising for decades, and those who persist in working hard for decades every day, everything they do is ordinary, but time makes them extraordinary.
Therefore, when you pay, the rate of return is not the most important. Think about what you have to do to last a lifetime. This is the most important thing. Time is a great author, and its return will definitely exceed your imagination.
Let me ask you a question first:
Look at another question:
This is the power of compound interest thinking.
Do you know that?/You know what? Do you know that?/You know what? Fat people never get fat at once.
R stands for what you are doing and n stands for time.
When r is positive, for example, if you insist on reading for half an hour every day, maybe for two days a day, the difference between you and others will not be shown, but after 30 or 40 years, the difference will be beyond your imagination.
As long as R is positive, that is, what you do is right, time will bring you miracles.
So in a long enough period of time, you will find that even if the return on investment is slightly different, there will be a great wealth difference between simple interest and compound interest.
The compound interest effect also verifies a sentence: every step you take today will give you feedback in the future. When using compound interest thinking, we need to open the timeline and look at long-term changes with businessman thinking and banker thinking.
Whether you want to achieve your goals or dreams, you can't do without perseverance. What the compound interest effect can give you is the result of your persistent efforts in the early stage.
Life is full of compound interest thinking. Money, ability, health, reading, communication and education all have the shadow of compound interest. Only by living longer can we enjoy the compound interest of life.
If life is an operation, then some people are doing addition all their lives: 1+2+3+4+5 ... while others are trying to do multiplication all their lives, 1 * 2 * 3 * 4. ...
But some people didn't stop there. They use compound interest thinking to maximize multiplication for their own lives and create life miracles. This is the gap between people.
At the beginning, compound interest was not much different from simple interest.
The same investment is 654.38 million yuan, and the annualized income is 10%. By the year 65,438+00, the difference was only 59,000 (20.0, 25.9374), but with the passage of time, the gap became larger and larger. In the 50th year, the single interest was 600,000, and the compound interest was 65,438.
This is the magic of compound interest: at the beginning, the compound interest effect is very small and difficult to detect, but when it develops to a certain stage, it will have a very amazing effect.
Compound interest is exponential growth. Many people say that my principal is small and I can't make much money by going to a fixed investment. But it will take some time, and our funds will multiply, but if we don't start, it will always be 0!
There is no doubt that the more the principal, the greater the final income, but the influence of the principal is not so great.
Earn 3% a year and 10% a year, the difference is obvious. We should strive to improve our investment ability and increase our rate of return when the principal is not much.
Compound interest every year or every day, which is much higher. The more iterations, the greater the power of compound interest. I really want to compound interest every second
I believe that most ordinary people invest by their own salary balance. The biggest mistake we can make when we are young is always thinking about tomorrow and trying to give ourselves all the responsibility for tomorrow.
In a limited time, put limited experience and wealth into a certain field repeatedly, persist for several years, and finally the snowball of wealth will roll bigger and bigger, realizing financial freedom.
What is the secret of wealth?
No, it's just a simple application of compound interest thinking: simple things are repeated, repeated things are done seriously, and that's all.
Since it is easy to make money according to the effect of compound interest thinking, why are there still many people who can't make money?
The true wise pursue the steady growth of wealth and balance the rate of return and time.
Buffett said: "Life is like a snowball. The key is to find enough wet snow and long slopes. "
Our assets have been swallowed up by inflation. Let's use the most typical example to illustrate that in the 1990s, 10,000 yuan households were rich, but now only 10,000 yuan is targeted at poverty alleviation.
Remember: every day you put off investing, inflation will have the opposite effect of compound interest, and the gap between you and others will become wider and wider.
Many young people say that I have no money to manage money, which is wrong! The greatest capital of young people is time. Can a 20-year-old 100 be the same as a 30-year-old 100? A 20-year-old 100 yuan can accumulate 10 years of compound interest, and the earlier you start, the easier it is.
Take pension preparation as an example:
If you start from an early age, it's actually very easy. When you are 40 or 50 years old, it will be difficult to prepare a pension.
Of course, this doesn't mean that you can't prepare at this time. This time is still the earliest time to start.
Creating wealth, not creating wealth by yourself, is the true meaning of obtaining wealth freedom.
Charles Munger said, "Try to be smarter before going to bed every day than when you wake up." This is the compound interest effect in personal growth.
The power of compound interest in both positive and negative aspects is underestimated:
This shows that if you insist on studying every day and be strict with yourself, over time, your personal ability will improve beyond imagination. This is the power of compound interest.
Life is a marathon, and you won't win at the starting point. Don't underestimate this 1%. The compound interest effect tells us that 1% can have a wonderful life.
Now, starting from 1%, we should establish the compound interest thinking in our life.
Many celebrities have the habit of reading regularly every day. Zeng Guofan claimed that he didn't study every day.
With the rapid development of mobile Internet and the flood of information, there are many misunderstandings in the field of knowledge compound interest, such as deep reading and general reading, professional reading and caring about everything, and fragmented reading abound. How to balance time and energy in the middle and realize the real "knowledge compound interest accumulation" requires everyone to screen, optimize and persevere in their implementation according to their own specific conditions.
The most obvious examples are headlines and WeChat. In fact, fragmented reading takes up a huge amount of time every day. What is the proportion of extracting information and transforming it into your own knowledge?
Open the headlines and see all you care about. How to realize transformation and how to obtain sustained and positive benefits is very important for the systematic accumulation of knowledge. Otherwise, you just stay at the level of "knowing", and you can't even reach "knowing", let alone "doing".
From this perspective, the accumulation of knowledge is a simple interest process, while the training of thinking is a compound interest process.
The marginal utility of knowledge accumulation is obviously decreasing. For example, reciting 0/00 poems of Tang poetry/kloc-is a very important and rewarding process, but it is not so profitable to recite all the poems of Tang poetry, because in essence, it is a process similar to knowledge accumulation.
Knowing how to recite 100 to 500 Tang poems is less than five times as fun.
The training of thinking is different. Charles Munger emphasized the importance of diversified thinking on numerous occasions. One kind of thinking and another kind of thinking can be said to promote each other, while one knowledge point and another knowledge point sometimes conflict.
Dong Qing said, "Any time you spend studying will be rewarded at some point."
So, find a fixed position, work hard, slowly and steadily, practice your martial arts with the general trend, wait for the compound interest effect, and accumulate wealth, but wealth will not come slowly at all. However, if you don't even have a fixed position, but you are saying that slow is fast, it is tantamount to talking in your sleep.
If wisdom is divided into homeopathy, Ming Dow and stunts, China people study homeopathy most, but it is not easy to form the habit of thinking because of too few decision-making.
Every diet, every exercise, and every health-related choice are actually compound factors added to our health, both positive and negative.
Exercise for half an hour every day (the form is not important, running, keeping, cycling, gym), 1 month, 2 months can't keep much change, but 1 year, 2 years, 10 years, 30 years later, the physical condition is very different.
Every time you stay up late, every time you don't eat on time, and every time you are not responsible for your body, it will affect your compound interest.
I haven't been sick for 40 years in a row, and I don't even have a basic cold. Is it difficult to do this?
I found it difficult at first.
If I don't get sick for 1 year in a row, it may be ok, but I haven't got sick for 40 years in a row and I don't even have a basic cold.
Difficult, really difficult.
Health also has compound interest. If you exercise more than 20 minutes today, your body will get one point of exercise, which will further promote your work and exercise tomorrow.
In fact, health is really not difficult. Eat three meals a day normally, don't stay up late, work and rest regularly, and insist on jogging for half an hour every day. Is it difficult?
Not difficult. You can make it with snacks.
Stick to it, and your body will repay you.
There is a saying in the workplace called "emotional bank".
Today, you took money from the "emotional bank" and hurt a friend's interests.
Today, when you win in cooperation with your friends, you deposit your money in the "emotional bank".
"Emotional bank" is actually your network resources. The more you store in a person's "emotional bank", the richer your network resources will be.
To put it simply, a person who needs to trouble colleagues every day and a person who can help colleagues every day will definitely leave a different image among colleagues in the company.
For example, the "smile principle": smile at every colleague at work every morning, and after one year, you will achieve unexpected results.
Why is this happening?
Because the people you smile convey will spread a good impression on you and give you feedback on your behavior.
For example, be more active when dealing with you, be more tolerant of your work and so on. These feedbacks will encourage you to smile more.
The setting of goals varies from person to person, but self-discipline and persistence are similar. Most of them are very excited and passionate in the early stage, and they will be extremely painful in the middle stage, because it is difficult to get out of the comfort zone and change the original model, which will become a kind of enjoyment and integrate into the lifestyle in the later stage. Most people stop before it is over.
You must be self-disciplined to save money and invest; You must stick to the end in order to gather fine water into a torrent; You must understand wisely that getting rich on a small budget needs the help of the old man.
The process of accumulating wealth with low compound interest is dull at first, and the dull period generally lasts for 7-8 years.
From then on, the process of compound interest accumulation will become very attractive and even exciting.
Some people say that I am already late. What should I do? Then we must find ways to shorten the gap with compound interest.
The true wise pursue steady growth and value long-term time rather than short-term rate of return.
People usually look down on or don't care about small progress. In fact, it is these small advances that can give you the future you want. Never before in this world. All achievements are the power of compound interest. I believe in the power of compound interest and the necessity of investment.
The life with compound interest pays more attention to the life with quality of life, because only such a life can go far.
Great people are not born great, but show their greatness in the process of growth.
Those who insist on studying for decades, those who insist on exercising for decades, those who insist on going out in hardcover for decades every day, and those who insist on meeting a stranger for decades every day. ......
Everything they do is not great, they are ordinary and everyone can do it, but because of their persistence, time makes them great.
When you pay, the rate of return is not the most important. Think about what you want to do and stick to it all your life.
Time is a great author, and its return will definitely exceed your imagination.
All these compound interests have become our daily life.
Regard compound interest as a slow-paced life.
This kind of compound interest may be clumsy and unwise,
But some people walk so perfectly, so beautifully.
Like, follow. ...
Some people say that practice is the only way to test all truth. In other words, time is the only way to test all truth.