One Secret of becoming a millionaire

hi friends i just want to share with you one
secret that’s able to get you to million dollar

income and here it goes the power of
compounding in fact i mean a lot of

people know about this component in fact but
they can’t really fully comprehend it i want to

use this example to show the effect assuming you
have one dollar to invest right now immediately

for uh for 20 years and let it compound for 20
years but of course uh hypothetically we say that

the compounding interest is hundred percent now
how much we will get it right and after 20 years

let’s say year one is one dollar year two is then
you you get a two dollar for the by year anna

you have gained a 500 512 dollars
so make a guess after 20 years

will be getting like 2 000 or twenty thousand
or even more than two hundred thousand

the eleven years one thousand twelve
years two thousand and by the year of

twenty first that is 20
years it’s really a million

magical of course we are talking about
uh assumption now yeah so what i want

to really emphasize is uh number one to
see the magical effects of compounding

number one you have to start
to invest as early as possible

number two is to invest over a long period of
time at least seven years and warren buffett

actually mentioned this compound interest is the
eighth wonder in the world yeah okay i have to

talk about this case study who handles your
money and it is a real story of my story

i mentioned to you right when i was in my
20s right i i wanted to invest but i don’t

know how so i rely on experia so i’ve got
this life insurance policy i bought and i

wanted to have some investment plans uh yeah and
i started in 2002 so every month i pay uh 61.50

okay for 18 years this year actually i
terminated later for 18 years so totally

i’ve paid our i’ve invested thirteen thousand
two hundred and eighty four dollars and being

a guess again uh how much do you think i’ve got
back up for my investment value for this year

after 18 years is it fifteen thousand or is
it twenty thousand or is it thirty thousand

guess what i only get back fourteen thousand

my profit is only one thousand plus
after eighteen years can you imagine

back then right i know how to invest if somebody
has taught me and show me right uh index funds

then it would be a different story let’s say
assuming uh i know how to invest in the next funds

i mean one of the index funds is xp500 first
search right yeah average interest rate is

9.8 assuming right i also put in 61.50
every month for the next 18 years

this is how much i will be getting better this
year 34 000 plus and my profit is 21 000 plus

so it’s a huge huge difference right if i do
invest in investing myself and usually fund

managers they don’t recommend index sponsor
because they don’t earn commission they will

actually do mutual funds and don’t don’t my my
take away is don’t rely on lesbian do it ourselves

we discover and get to know how to invest
ourselves okay if let’s say you’re wondering

how to calculate the compound closure you can
write this down calculator side uh compound

interest later you can just go search it i’ll
just show you from here is how it goes up okay

initial balance is zero interest rate i put 9.8
percent because it’s the sp 500 uh i put 18 years

and uh it is a yearly compound so everyone i
put in 61.50 yeah i just pressed calculator

very straightforward and it will show this is how
i get the thirty four thousand five hundred and

fifty dollars uh i’ll share with you a story uh
there’s this uh these two persons are assignment

they’re very good friends of their classmates
in fact they know each other for a long time

and um they start to they start to also attend
a course and they learn about how to invest

there’s a lot of similarities between
both uh some differences as well

similarities is that both of them like some other
people they are not a risk taker they want to they

know they know that they have to invest but they
are not a risk-taker they want to play very safe

uh the difference is simon is a action taker but
peter right he’s more of a passive passive person

he wants to wait a while and wants to wait a while
and think about it before he starts to take action

so in the course itself they also understood about
the sp500 you can see that from this chart right

over the entire year right i mean it has gone
through like great depression yes went through

like world war one world war two and it still goes
up of course i mean we all know that the stock

market goes up and down up and down but eventually
over the long period of time it still goes up

so this is let’s see let’s see uh it turns up
on investment okay example right simon right

he invests he starts to invest at the age
of 21. so he has some savings of like 20k

he put in every month he put in 700 to invest and
peter right likewise the only difference that he’s

uh he’s lower so he only starts to invest at the
age of 28 but he also put in the same amount at

age of 28 right he put in a capital of
20k and invest 700 like simon as well

so as i mentioned right both of them they wanted
to be very safer so they invest in xp500 the

interest rate is 9.8 so at the age of 45 you can
see there are returns which is quite shocking

simon right managed to get a passive income of
more than a million he becomes a millionaire

at the age of 25 and peter right he’s getting like
472 000 and the difference is more than 50 percent

just by investing early no one
become a millionaire the other one

is still not that is about the
power of compounding effect

so i had to really ask you the question can
you afford to wear that the question is no one

because combining effect is about starting as
early as possible and can you afford not to invest

what will you be missing out on the
questions that we need to ask ourselves

what you’ll be missing out is the magical
effect on the compounding interest will be

missing out is to become a millionaire sooner
finally my friends stay safe and invest well