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Book Discussion - The Psychology of Money

Not Overthinking

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What Is Compounding for the People Who Are Listening?

Compounding is the process by which an initial lump sum becomes extortionately large through continual application of lak. A small percentage grows through it, but as that grows and grows, the compounding effect takes over. Warren buffet's net worth was 84 billion when he started investing aged ten. If he had invested between the age of 30 and 60 with exactly the same returns, his net worth would be 11 point four million. You don't need tremendous force for tremendous results. You just need compounding and a very long period of time.

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