Compounding...

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The phrase "Compounding" used to bug me a lot during the early days of my financial investments. The energetic newb intuitions provoked me to ignore the possibilities which I could have achieved, if only I got to see the bigger picture via compounding! Rest assured in several cases compounding may as well act as a double edged sword! As the effect of that sharp sword has left scars in my investments in the past. Thus, that is how we improve and get wise as we keep walking forward.


Compounding


The piece of cake definition which I can make someone understand what COMPOUNDING is :
It's a way to generate income from ones assets. At the same time re-investing those generated income along with the main asset. This way our principal amount starts to grow as time passes by. Although compounding can be done in various aspects. But since we are in crypto, I want to remain here and not roam around that much!


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One of my good friend on HIVE, @raymondspeaks helped me to see the bigger picture on a certain project which I invested upon. I have been COMPOUNDING ever since on that particular project. Tbh I intend to keep doing so, for a long period of time. By compounding I am close to making my principal amount to reach double very soon and hopefully I will keep on doing so, until I reach 10x of my initial investment ;)


Key Notes


  • Compounding is a long term game
  • Money that is not needed for a certain period of time
  • Forget the $ value and keep on compounding
  • Only see the result after your dedicated timeline has reached
  • DYOR before investing

I will specifically try to explain my POV regarding the key points via one of my investments in HIVE.


I am quite heavily invested on Splintershards aka SPS. If you are not aware of SPS, its the governance token of Splinterlands. I hold some SPS in my account and I have been staking aka compounding my SPS everyday from the earnings that I am making via different sources. Since I am in it for a long term game, my first point is taken care of Compounding is a long term game thus, I intend to follow that and like I said, I am in for a very long run on this one.


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My second point Money that is not needed for a certain period of time I do not need this sum of money for a certain period of time. Which is why, I did a thorough calculation on the pros and cons of this amount of money and the duration of time which I am to hold this money for. Thus my second point is also taken care of. Now that we come to the third key notes Forget the $ value and keep on compounding the $ value does not bother me that much. Although, this is money which we are talking about and whenever the price falls, I do feel little bit of itchiness across the left side of the chest lol but I am really easy to convince myself about the lollipops which I am going to get in the future and I do praise myself for not going through the stress of remembering this $ value. I am a narcissist in this matter lol.


Only see the result after your dedicated timeline has reached until the time frame is reached I can only keep on going no matter what. This does gives me hope and some positive motivation about the passive income which I will be getting once my desired time frame is achieved. Till then only compound should be going on!


DYOR before investing This is the final and the most important issue of compounding. The reason I stated it last is because this is where it gets tricky. As the double edged sword which I am referring to lies here. The reason why compound can bring you riches is because if you do a through research and put your time and money in choosing the right projects. As only than and only than you can get the desired result in longer term. As because a good project ensures you a wise and substantial return in the long run. That is when your time and value will get the appropriate value. Whereas, if you compound your way through a bad project than no matter whatever you make, the end result will not be a successful one or the one that you actually seek. I have been through this stage and I know how it exactly feels. Which is why I stay very cautious and do my best to ensure myself what I an getting into and do some precise research of my own as it's my money and I am solely responsible for my own actions. As if things goes by the plan, I'll go from rag to riches and if not I will compound my way to eons ;)


Is there anything which you are currently compounding your way to riches?? ;)


Image source : 1, 2


Best regards
Rehan

Posted Using LeoFinance Beta



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