Have you ever realized how the combination of time and compounding interest would benefit you as an investor? If you haven’t, let me tell you this – time is the greatest ingredient that makes the compounding interest works for every investor in the market. Regardless of whether it’s bonds, stocks, savings account, time deposit, money market, mutual funds, UITF, or other investment types, you will never go wrong with compound interest. In this post, I am sharing with you why you should chase compound interest by starting investing now.
Catch me in my live training events! (quick plug)
The heart of why I do this seminars is I want to build a generation of Filipinos with the right foundation in stock investing. I want to bring smart investing to every Filipino around the world! If you would like to know more on how you could time the market checkout the trainings below.
Stock Smarts Cebu — April 6 & 7, 2019
Investing Insights Japan – April 13, 2019
Stock Smarts Singapore — May 18 & 19, 2019
Investment Conference 2019 – May 25, 2019
Stock Smarts Manila — June 15, 16, 22, 23, & 29, 2019
Stock Smarts Iloilo – July 6 & 7, 2019
Stock Smarts Cagayan De Oro – July 20 & 21, 2019
Stock Smarts Hong Kong – August 11, 2019
Stock Smarts UAE – August 30 – September 3, 2019
Stock Smarts Qatar — October 3 – 6, 2019
Stock Smarts Taiwan – November 2, 2019
Once you have your investment moving and it makes a certain percentage as returns, the compounding interest you get is a gain or an added value to your investment. And the moment it became a part of your investment’s base, it would earn a compound interest again and again until you see your investment grow twice or thrice than it’s original value before. If you are aiming to increase your money at a certain level, I recommend you to start investing as early as now so you would have longer time to earn your compound interest.
That’s right, compound interest is an income you can get without a single drop of sweat. Say you have an investment in bonds at an annual rate of 7%. Each year, you will get a return of 7% of the face amount of your bonds on top of the principal payment the company is paying you until the maturity date of your investment. Do you think it’s possible to earn that return in months of working here in the country? Remember, the most effective strategy if you are vying to win a financial freedom at a young age is to find a passive income that works for you.
Another good thing about chasing compound interest is that you get to see a lot of options in the market. You can invest in stocks and still be able to earn your compound interest. You can buy bonds and still get the return you expect through compound interest. Whether you choose to invest in a portfolio with high or low risk, you are still eligible to yield passively. The only difference is that when you invest in high risk portfolio, the rate is likely to be higher than when you choose the low risk. Just keep in mind that regardless of what investment type you choose, it will eventually work as long as it fits you as an investor.
As I always recommend to the investors who ask me about this, there is no specific investment where you can earn the highest interest. Each investor has unique assets in order to see what’s best for them and what’s not. The only way you can find the best of the bests is to try them. Don’t just stick to one investment. Learn to diversify and minimize the risk of losing your investment. In that way, it will be easier for you to look for the good and downside of investing.