AI-powered
podcast player
Listen to all your favourite podcasts with AI-powered features
The Impact of Transaction Costs and Taxes on Compounding
Warren Buffet's passion for compounding is evident, but taking distributions in cash can result in significant transaction costs and taxes, interrupting the compounding effect. A study by collaborators of Hamilton will Thorndyke analyzed the impact of taxes on continuous compounding over 25 years, demonstrating the significant disruption caused by transaction costs and taxes.