The Basics of Growing Wealth

The Basics of Growing Wealth

3 minute read

Imagine you're walking into a Bamboo Forest. Towering 10, 20 and even 30 meters high, the bamboo create a serene, almost surreal canopy of green. It's magnificent and awe-inspiring.

As you walk you get the feeling that nature is diligent and persistent.

Yet, this majestic forest didn't just appear overnight.

For the first three to five years, a bamboo plant dedicates itself to developing a robust root system beneath the earth. It's invisible on the surface, but it's laying the foundation for something extraordinary.

5 years… Wow

Then, almost miraculously, the bamboo surges upwards, growing up to 1 meter daily.

This rapid growth, following years of patience and unseen magic, transforms the landscape, as far as the eye can see.

Compounding wealth works in the same way.

And our wealth will transform the landscape, the life of thousands of people, and the future of many children when we are persistent.

At first, your efforts may seem fruitless. Despite saving, investing, and waiting, you see little visible progress.

It can be frustrating at times, to say the least!

But just like the bamboo, your investments are quietly laying a strong foundation. The growth of wealth, though gradual at first, can eventually rockets, leading to huge financial gains.

Taking Warren Buffett as an example, majority of his staggering wealth was amassed after his 52nd birthday. It's a startling statistic that underscores the power of compounding.

It begins slowly, but once momentum picks up, the growth is astonishing!!

Einstein said “compound interest is the 8th wonder of the world, he who understand it, earns it…. he who doesn't,…pays it”

So where do you start, if you have not started yet?

If you have never invested before, reading this is a great place to start. The motivation and education needs to come first.

Knowledge is……

Yes you got it!

POWER!

Understand that a small amount, minimum 10% of everything you earn needs to be put aside for investing (this is after money for a 3-6 months expenses have been set aside).

This is called ‘the emergency fund’

It isn’t easy at times, but the journey is worth all the effort.

If you have been putting money aside, and ready to invest, then searching for assets that resonate with your believe, hobbies or interest are the best places to look.

In a future letter we will talk about the 4 M’s of investing, you will love it!

For now, thanks for reading. Keep thinking about and buying assets.

-Stefan