Understanding Compounding Income & The Tail End

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Today I want to revisit something I’ve spoken about a couple of times. I want to unpack this idea of why it’s possible to build life altering wealth, particularly a passive income stream, in a low risk way in 2-5 years. 

When I first spoke about this concept with people who are new to the world of alternative, I got cries of it being incredulous, that it must be voodoo, there must be something wrong, it must be high risk. Some people have asked me if it’s comparable with cryptocurrency trading. 

It’s certainly not rocket science to understand that the concept of compound interest and compounding is what can deliver results over a longer period of time. Most of us know and understand that.

But when it comes to developing a stream of income that you can rely upon and live off, and that’s really what I’m aiming at when I say life altering wealth, it’s certainly not voodoo or high risk investing, and it certainly has nothing to do with crypto markets. 

There’s a concept that I’ll call the “tail end,” and if you understand this principle then it becomes really self evident as to why it’s possible to get really exponential results in a short space of time.  

Everybody understands that compound interest is, as described by Einstein, the eighth wonder of the world. What I want to talk about is the ninth wonder of the world, which is not only allowing for compounding, but then taking returns and reinvesting them in order to build a higher velocity.  

Now for those of you who don’t know what the velocity of money is, I highly recommend you go back and listen to my podcast, which is all about the velocity of money and that ability to reinvest. 

We cover:

  • taking returns & reinvesting to build a high velocity,
  • the difference between reinvesting vs not reinvesting,
  • why not all investments can increase your velocity of money,
  • the tail end of your investment journey,
  • client case study, and 
  • understanding the concept of compounding income.

Show Notes:

00:00 – Intro
2:52 – Taking Returns & Re-Investing to Build a High Velocity
04:56 – Difference Between Re-investing VS Not Re-investing
06:45 – Not All Investments Can Increase Your Velocity of Money
07:52 – The Tail End of your Investment Journey
08:31 – Client Case Study 
11:06 – Understanding the Concept of Compounding Income
12:35 – Outro

 

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