Tuesday, 30 July 2013

"Money makes Money". Money can snowball.

You have an investment which you are now also getting a dividend yield of at least 7%, paid in regular instalments.  What do you do with the money after your tax has been paid?

What you don't do is withdraw it from your account and spend it.  You could do that, but that would be stupid because you can use dividend payments over time to start to accrue your wealth.  Over time, this can create a snowball effect as your wealth compounds.  Imagine getting to the point at which your dividend payments alone are becoming enough to make it worthwhile re-investing them alone, aside from anything you can top it up with yourself.

When you get to that stage, you will be on the verge of creating a self-sustaining money machine.  It is what is meant by the old phrase "money makes money".  In fact, it does.

Getting your money to work for you is indeed possible if you adopt some of the core principles of investing and apply them consistently and patiently over time.  The more time, the more money will compound. 

WHY NOT have a 100-year plan that would ensure that your children and grandchildren grow into very wealth people indeed.  Investing is a relay marathon, not a sprint. 

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