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The Impact Of Long-Term Compounding


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The Impact Of Long-Term Compounding
It’s incredibly corny example, but take Warren Buffett. This
is how he built his wealth over time.
Source: dadaviz.com
Don’t look at the numbers (or random x-axis). Look at the
relative growth. Between age 32 and age 44, Buffett
improved his net worth by 1257%. That’s pretty exceptional
growth over 12 years, right? Especially if you take into
account that he lost a lot of money in his 40s. But that’s not
the point here. Look at this. From age 44 to 56, Warren
Buffett’s wealth increased by a ridiculous 7268% over a
similar time period. And of course, this is his net worth and
there’s always luck involved with these type of numbers.
Plus, his net worth is based on stock prices — which means
a big portion of it could be all gone tomorrow. But still, it’s
about the growth he achieved over time.
Another thing: Buffett acquired 99% of his net worth after
he became 50. Think about all those spoiled idiots in their
teens, twenties, and even thirties (me included), who


complain about the slow progress of their career. This helps
you to put things in perspective.
Anyway, there’s a lot of Warren Buffett porn on the internet.
And a lot of people pretend you can become rich by
investing in the stock market. All you need to do is to buy
their course that contains all the secrets to wealth. Yeah
right. It doesn’t work that way. Personally, I hate stocks, and
I think normal folks should stay away from Wall Street. I
prefer real estate. However, Buffett is the perfect example
of sequential success. You can achieve big things with small
actions, that build up over time.
This is not only true for money. The same concept applies to
skills, health, and relationships. You don’t build a strong
body in a day, month, or even a year. It takes years of
consistent effort. Shortcuts don’t exist, no matter how
‘smart’ you work. For example, cyclists under the age of 28
rarely win big races like The Tour The France because it
takes them years to build the strength, stamina, and
mindset you need to win.
If you want to see the impact of compounding in your own
life, it requires you to focus on one thing at a time (for every
aspect of your life) and always look at the bigger picture. It
comes down to this: You’ll get there if you put in the work.
Who cares if it’s tomorrow or 20 years? It 
will
happen. That’s
all that matters.



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