Investing Knowhow: Financial experts agree that money management is one of the leading aspects that determines the success of a long-term investment.
Investing – A Good Way To Build A Wealth
An effective way to build wealth is to invest a regular savings rate. The compound interest effect develops its full potential over several years.
We show you an example of how a portfolio can develop if regular investments are made and a long-term performance of 8% takes place.
The analysis was performed for the periods of 3, 5, 10, 20 and 30 years.
The example is calculated very conservatively because the monthly savings rate remains the same over the entire period. For most investors, the savings rate will increase over time.
Assumption performance of +8% (stock market average) over several years:
We start with an investment sum of 10000 USD.
An additional 500 USD is invested every month.
An additional 2000 USD is invested every January.
3 Year Development
Total Invest: 31'500 USD
Total Value: 37'905 USD
Total Profit: 6'405 USD
5 Year Development
Total Invest: 47'500 USD
Total Value: 63'651 USD
Total Profit: 16'151 USD
10 Year Development
Total Invest: 87'500 USD
Total Value: 154'318 USD
Total Profit: 66'818 USD
20 Year Development
Total Invest: 167'500 USD
Total Value: 536'455 USD
Total Profit: 368'955 USD
30 Year Development
Total Invest: 347'500 USD
Total Value: 1'530'678 USD
Total Profit: 1'283'179 USD
Albert Einstein called compound interest the eighth wonder of the world.
Investments benefit enormously from a long-term investment horizon.
We already know that long-term investing is not what most people want. Get rich quick is much better and in the long run we're all dead. But it's still a good option. Many retirees are very happy that their long-term investment will enable them to enjoy their retirement.