Start doing this: save 1 dollar tonight, double the amount tomorrow, which is 2 dollars, then 4 dollars the next day, 8 dollars the day after that, then 16 dollars…. Keep double the amount of the previous one and you will soon find out the compounding figure exceeds your monthly or even annual wage.
This the power of compounding effect. As Warren Buffett demonstrate, first he invests and make sure he doesn’t lose money; second, he reinvest what he earned previously into his next investment. When given time, the money will roll up itself pretty quickly.
“He is Warren Buffett! What does it have to do with an ordinary dude like me?” You may wonder. Here’s what an ordinary Joe can do: think about how much resources you have. It can be stuff that lying around in your house collecting dust; the money you put into your bank account but receive very little interest, if any at all; or specific knowledge in your mind. List them out. Then think about how can you leverage them to generate money for you? When you have an idea, realise it. Then you should have your first start money.
Now pay attention, observe any business opportunities around you. Choose one that is most likely to retain your money value and invest. If you don’t know where to start, reach out to 3 most intelligent people you know and ask for advice. Be open-minded to their opinions but also remain critical yourself.
What do I mean? Say now you have a small amount of money. One of your friends is preparing to open his first restaurant. You know if you hold the money in your hand it will surely depreciate. However, if you invest in your friend’s restaurant, chances are you might win some money back. The problem is that how do you his restaurant will work? Besides research yourself, contact three successful restaurant owners and ask for their secret to success. They will throw at you different methodologies and therefore you should remain neutral and analyse their answers. Then you can reach a conclusion yourself. The project doesn’t need to a restaurant, it could be any business model.
When you earn the money back, repeat the process. Alright, enjoy the power of compounding! I’m going to check my powerball ticket. If I didn’t post anything from tomorrow, you will know what happen. XD
Irene Tan 