Magic Of Compounding In Stock Market

Have You Heard About What Compounding Is And How It Works In Stock Market??.You Have Came Towards An Amazing Question That Could Answer All Your Financial Problems If Applied Correctly In After Reading This Post. I Also Has Said About This In My Previous BlogPost That I Would Be Further Discussing About Stock Market In Detail  And Try To Solve Your All Doubts Related To Investment And Stock Market To Make You An Expert Investor. First I Highly Recommend You To Read My Previous BlogPost If You Really Want To Earn Money From Stock Market And You Are Serious About That .So Leaving These Things Lets Start Main Discussion For Which You Are Reading This Post. To Start Knowing Compounding In Detail We Need To Understand How Powerful This Thing Is.Sir Isaac Newton Has Said "Compounding Is The Eight Wonder Of World, One Who Understand It Earns From It And One Who Doesnt Pays For It" For Understanding This Quote We Need To Understand Types Of Interest From Which We Earn. The First Type Of Interest Is Simple Interest About Which I Would Explain You With Example.For Example You Have Invested 10,000 Rupees In FD(Fixed Deposit) Of Bank For A Interest Rate Of 10% Each Year.First Year You Would Have Made a Profit Of 1,000 Rupees And Next Year  Also 1,000 Rupees And So On Until You Want To Ge Your Money Back. This Would Have You Given a Fine Returns Without Taking Any Risk But What If I Tell You There Is Another Concept Which Would Make You a Millionaire Or Give You So Much  Returns You Never Would Have Expected That Is The Compound Interest In Which At First Year You Make Returns Like Simple Interest But Next Year Your Profit Earned In First Year Generates Returns For You And Profit Is Compunded Every Year Not Only Your Initial Amount Invested. Got Confused Right What I Said Dont Worry a Example Would Remove Your Doubt.For Example You Invested in Share Of Any Company Which Gives You a Compound Interest Of 10% Every Year. First Year As I Said You Would Earn Same Amount As Simple Interest That Would Be 1,000 Rupees But Next Year Your Profit Of 1,000 Rupees Will Also Give You Interest Of 10% Which Is 100 Rupees In Addition To Your Profit Earned Next  Year Which Would Also be 1000 Rupees. Infact You Would Have Earned 1100 Rupee Next Year Instead Of Only 1100 Your 100 Rupees Will Also Generate Returns Which Is Of 10 Rupees In addition to 1100 Rupees So Like This Your Money Compounds Every Year, At Starting This Extra Returns Looks Nothing But Very Small But As When Your Time Increases This Becomes So High That You Cant Have Imagine In Your Real Life. If Calculated Risk  Is Taken This Would Earn You So High Which Could Be Explained By Example. Warren Buffett The Welthiest  Investor In World Have Generated More Than 100 Billion Dollars Which He Earned By Achieving 21% Annual Returns So You Can Imagine How Much Wealth Could Be Created If Method Of Compunding Is Applied In Stock Market I Would Be Disclosing This Post By An Last But the Best Example. For Example I Gave You The Choice That Today I would Be Giving You 1 Crore Rupees And Second Option Is That In 30 Days Of A Week First Day I will Give YoU 1 Rupee And 2 Rupees Next Day Then 4-8-16-32-64 Rupees And So On. Which One Would You Like. Obviously First One Right But If You Had Choosed 2nd Option At The Last Day Of Month You Would Have Earned More Than 100 Crores Which Is Far High Than 1 Crore. Shocked Right, But You Could Do These Calculations In Rough And Really See The Real Magic Of Compounding.So The Moral and Lesson Of This Post Is No Matter From Where You Start It Matters Where You Finish So Please Keep Investing And Dont Loose Patience Your Patience Will Be Key Towards Your Success. So We Will Meet In You At Our Next BlogPost 

Untill Then,

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