Benefits Of Investing
Trading is a form of investment. Investing is a long-term game that takes time, and the benefits of investing compound over time. This is called compound growth...
I started trading to make money and grow my savings.
Investing is not for paying bills
Trading is considered to be a form of investment. The word “invest” means to “Expend money with the expectation of achieving a profit or material result.”
What the investment meaning leaves out is that investing takes time. Investing is a long-term game. How long? That depends on the amount of your investments and your investment goals.
The bottom line is that investing does takes time, and the benefits of investing compound over time. This is called compound growth.
What is compound growth?
Compound growth happens when a transaction (like a trade, a purchase, or a sale) increases (or decreases) the value of an asset, and updates, or adds to the starting value of that asset. For example: the month-end or year-end value (balance) of your investment account.
How compound growth works when trading
Here’s a look at how a $1,000 investment in trading can grow...
The chart above shows the effects of compound growth for a trading investor who starts with $1,000 and achieves an 8% return on their trades each month for 5 years. I used an 8% return rate because I target at least 8% ROI on my trades each month.
The first thing to notice is the bottom line. At the end of 5 years a $1,000 initial investment will grow to more than $100,000. I think that is awesome. And I can’t think of anything else I can do with my money that’s better than that, and not a lot riskier.
Next, take a look at the growth each year. I highlighted the yearly totals in green. Notice that at the end of year 1 your balance would be $2,518.17. That’s a 182.18% increase in just one year. It gets better from there. In year 2 your balance would grow to $6,341.18 – that’s 534.19% growth in just 2 years. And, in year 5 your balance would be $101,257.06 – that’s an incredible 10,025.7% growth rate on your initial $1,000 investment in just 5 years.
It gets better...
What happens if you deposit $200 each month into your trading account...
The chart above shows the effects of compound growth for a trading investor who starts with $1,000, achieves an 8% return on their trades each month for 5 years, and deposits $200 each month to their trading account. This $200 per month additional investment totals $12,000 over the 5 years. It adds $20,051.42 to the ending account balance after 5 years. That’s a 67.0952% growth rate on the $12,000 additional investment.
The bottom line
All this is achieved with the compound growth effect of hitting a simple 8% monthly return target on your trading. Trading like this is a powerful way to secure your financial future. This is why I trade. It’s why I share what I know with my subscribers. And it’s why I suggest you subscribe and learn How I Trade.
I asked a friend who is a professional trader to show me how to trade. (BTW: She has just agreed to be my first interviewee. Stay tuned for an announcement on that.) I watched her transition from a full-time job as a technical project manager to a full-time day trader. In just about two years she made more money trading than she made at her day job. She quit her day job and has never looked back. She now trades full-time, travels at will, enjoys playing golf, and lives a comfortable financially secure lifestyle with her husband.
Trading is a lifetime financial skill. I’m happy to share How I Trade with you so you can start your trading journey safely and learn from my experiences.
Happy trading!
