How Compounding Works? Problem with Stocks & Mutual Funds
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- Опубликовано: 10 май 2024
- Compounding is a phenomenon that works wonders over time. It's like a snowball rolling down a hill, gathering more snow and growing larger as it goes. At its core, compounding involves earning returns on both the original investment and the returns that have already been generated. This creates a snowball effect where wealth accumulates exponentially over time.
Here's how it works: let's say you invest Rs. 1000 in a stock or mutual fund that earns an annual return of 10%. In the first year, you earn Rs. 100 in returns, bringing your total investment to Rs. 1100. In the second year, you earn 10% on the entire Rs. 1100, not just the original Rs. 1000. This means you earn Rs. 110 in returns, bringing your total investment to Rs. 1210.
As the years go by, this process repeats itself, with your investment growing larger and larger with each passing year. The longer you leave your money invested, the more powerful compounding becomes. Over time, even small, regular investments can grow into significant sums.
Compounding is often referred to as the "eighth wonder of the world" because of its remarkable ability to grow wealth over time. However, it's important to remember that compounding works best over long periods. It requires patience and discipline to let your investments grow and resist the temptation to withdraw your money prematurely.
By harnessing the power of compounding and staying invested for the long term, you can build wealth steadily and achieve your financial goals. So start early, invest regularly, and let the power of compounding work its magic for you.
Compounding isn't just about finances; it's a principle applicable to life's many facets. Small, consistent efforts, like daily exercise, can compound into significant improvements in health. Similarly, acts of kindness in relationships build trust over time. Skill-building, with just 15 minutes of practice daily, leads to expertise. This universal principle underscores the power of consistency in achieving incremental gains. So, whether in finances or personal growth, embrace the compounding effect, and watch as steady efforts yield remarkable results across all areas of life.
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Could you please review my monthly 1.8 lakhs investment portfolio - MF ( invested)
Any corrections or diversification needed ??
Uti nifty 50 - 30 k
Uti transport - 30 k
SBI contra - 30 k
Quant infra - 20k
Motilal midcap - 20 k
Parag park flexi-20 k
Franklin techn - 10 k
Nippon Pharma - 10 k
Bandhan small - 10 k
I watched more RUclips channels regarding share market. But only you showcase the figures and building confidence. ❤
When I lose focus on my finances, I watch your lessons to get back on track. Great bro
Great bro
Finally a video that explains market conditions correctly. Tired of seeing influencers assuming MF returns to be fixed like FD and misleading people
Y not you start financial literacy in school level in india because india have poor in finacial literacy but strong in talent its need to start school level
bjp mp Tejaswi Surya has spoken about this in parliament ...
Yes I agree....
Unfortunately Education system is designed to create workers not financially independent people or entrepreneurs.. if we want to save our kids from the rat race we should educate them and take action ..The big sharks won't let anyone change the design for complete masses ..
Hi boosan, I'm recently watched, your one youtube shorts that's pushing me to watch all videos in your channel, thanks for sharing your knowledge with us😊😊❤
This Video not only explains how Compound works in Finance but also well explains how we can apply it in Life and work growth. Thank you for sharing the knowledge.
I used to watch and very rarely subscribe and do comments, really your videos are so informative , please keep posting and help others
All videos main concept is saving and investing....
But different different videos for same concept without boring...
One of the chennal I'm expecting videos. 😊
Last part 👏👏 Motivated
Thank you.
Excellent high quality content. Cheers mate!
Much appreciated. Thanks for sharing Boosan😊
Nice information on compunding, thanks boosan
Subscribed !!
Really impressed bro ❤
Hi bro... Again you are done good job, i am sharing your all video with friends. Thank you very much❤🎉
My financial investment when failing I am just compromise my self when I saw this kind of videos super
Well explained..
Expecting more videos like this bro..✨
Nice explanation. Thank you
Quite useful Video Boosan bro.. Need more content like this.
Super and Inspiring
Very useful macha❤
Keep going
Really appreciate your work❤
Excellent explanation ❤
Excellent vedio bro
So nice very useful info v want more useful content about investment bro 😍😍👌👌👌👌👏👏
Sir, rocking 🎉, continue your job
Vera level explain bro thnks bro😊
Great brother 🎉beautiful insights from you
Hi Boosan.
Your videos are really informative and gives more clarity for beginners. Thanks lot for real time examples and keep working for your goal.
Semmaa explain broooo❤🎉🎉😊
Excellent bro.
Excellent video 📹
Hi Bro, very useful awareness message. Kept it up.
Very useful macha❤
Watching from kerala
Excellent bro👌
You are the one who implemented the thought of saving and investing to me!! Thanks a lot bro ❤
Love you bro. I'm big fan of your teaching.
superb bro
Well explained boosan
Thanks Bro.. You are amazing ✨
Excellent example Bro
My Most loved and reliable financial advisor ❤
Your videos helping us to build financial knowledge day by day🙏🏻😇
Hi Boosan, Really good explanation and narrative. Talk about how a stock should be picked and the entire procedure...
Excellent work 👏
I like 🎉 your videos bro thanks for your explanation & experience 🎉🎉
GDP is the yearly output of an country, not the total valuation. I agree with your point on compounding power. But I see a lot smart people also making this mistake. Hope, you'll clarify this on another video to your audience.
Sir, continue your investing videos i am waiting for your videos…
Boosan illa pa ne..Mass. an...good one broe🎉..keep it up....BTW r u making these videos from india ?.
Thanks bro
Thanks Boosan 🎉❤bro
hi bro im a new subsciber to your channel.Indha sip mutual funds la ipo dha learn pana start pani iruka unga channel la neraya videos iruku beginner ku enaku yedha video suggest panuga yedha pakuradhunu terla adha
❤️ You ❤️ are ❤️ my ❤️ inspiration ❤️ brother ❤️
Unsung hero with less subscribers
Perfect explain 🫡
அருமையான பதிவு
nice dhandho invester Mohnish Pabraiyoda oru point vechu oru videyove potteengaley..
Today I started my investment in mutual funds.
Credits to Boosan bro😊
Tq🎉
Bro neenga finance thavira productivity time management idha pathi ellam kooda videos try panunga bro may be another channel
I have invested in 3k in RD
15 k in MF
20k in gold chit
5 K in LIC
2k in PF
10K in PMSK women child scheme
Stock it depands on market trend
Hi Boosan, a general question : When we invest in ETFs, can we get dividends from the individual stocks which pay dividends ? Pls revert. Thanks
Hi bro,
I'm big fan your video bro.
Stock yeppadi avarage panuradhum oru video podunga bro. Yeppadi oru stocks bad nu find panuradhu adhu la irundhu yeppadi veliya varadhu nu konjam sollunga
Looks like Bro recently watched Manish pabroi video
Hi bro can you please give the idea on how to hedge the stocks during market down
Boosan, Kindly create video on Taxation for divedend
@Useful.Information.Boosan
Thank you for explaining about compounding effect. I always wonder how the volatility in stock market does compounded effect. You explained it easily thanks again.
However, can you highlight more about this. Suppose assume after 10 years due to huge crash you will lose almost everything except principle there are chances to even lose this. How do we handle this situation? Because it will take huge time to appreciate isn’t it.
Please reply on this
Hello Boosan, I am new to stocks & mutual funds can you suggest me which investment is good to start
Aditya Birla Sun Life PSU Equity fund Direct Growth பற்றி ஒரு video வேண்டும்
Brother how did u gain this much knowledge? How do u spend your time? Wish to know yo day to day schedule
Hi Boosan, please come out with a video on career options in stock market say something like NSE Academy tie with some university? Or something like that. For people who are good at market analytics and who would want to pursue a career in the industry. Say to get into some AMC company like Nippon AMC what are required to do if you are not a CA and what kind of certifications one should take up.
Hello Boosan. Please include english closed captions like before. My non tamil speaking friends used to watch your videos a lot!
One Doubt Bro..40 k 30 year kattuna nashtam nu solringa..inum oru 5,10 year la 40k ku ipo irukra athae money value irukuma..2024 la 50 lakhs motthama kodukrathum 30 year konjam konjama 1 Cr kattunalum , renduthoda valueum equal or konjam Munna pinna thana irukum..
This is Mohnish Pabrai article in US. Just a translated version.
Hi Boosan, I am belssed to be at a point to increase my SIP amount. I am investing in Axis small cap for last 4 years via SIP but of late the fund is not up to the mark. I am thinking to continue the same amount I SIP for Axis small cap, and start a new SIP for Quant small cap for which I invest my additional SIP amount.
Is it a right thing to do or I should increase the SIP amount for Axis small cap itself?
When small cap is not doing good it's because of market down trend or sideways.. now you want to open a new sip in same small cap.. try to go with large cap or focussed fund..
Big fan of your work... Anand srinivasan says investment in SGB is high risk . If the government changes then they may close the scheme... Or current government also can do the same... Your views on it???
Yes bro need answer for this that why i have a slight fear in sgb
Checkout this post for detailed explanation : ruclips.net/user/postUgkxcPu4ISz73Cm7jj_Dnp0n52jRUvOW_x0u
@@finance.boosan thanks brother going to acquire some now
Bro, earth is running based on trust. What ever money, gold or bond, everything based on trust only. So no worries.
One thing you need to do that is diversifying your investment..😊
@@kumararanjitham1 private company mela enaku trust irukku bro indha government mela dhan konjam doubt uh adhan ippa clarify aaiduchu
Theoretically it's ok but Yengirundu anda interest ivlo varusham yeduthirupanga ?
Overall world economy le oru small portion dan long-term le kedaikum
Hi Boosan, I'm ur new subscriber. I have 0 knowledge about stocks . Past one weeka im seeing ur videos n trying to learn things. As a layman it a bit difficult to follow these things like how to identify , invest n track on a direct plan.
If possible can you make a video for people like us.
God bless 🙏...
Hello Chitra,
Did you get a chance to check this video - I tried to list it from basics
Best ways to invest in 2024 | ruclips.net/video/VofoFd_jW7g/видео.html
Not yet Boosan I'll watch it now... Thanks for your reply.
Hope I'll try n learn more from your videos 😊.
Sir, what if an Indian movie to abroad and can continue his Mutual Fund from there. Please advise
Solar project investment giving 15% IRR, so tell us your thoughts about this
Hiii brother, i want to invest in SIP. Pls assist me. After zerodha demat account open panna pearagu SIP eppadi imvest pandrathu solluga
I got married a year ago, im planning to invest 1.7L per month in various investment tools (mutual funds, stocks, crypto) for the next 10 years, i might increase this depending on expenditure, job change etc. But I'm also planning to withdraw a good chunk from this every 3 years to buy land in outskirts of my town where land prices are booming, but will keep investment nonetheless. Is this a good strategy?
Monthly investment 1.7 lakhs uh . Appo evlo bro salary 😮
@@Lifeeasycool2.5L bro
I think Monthly salary 5 lakh
Adangommala 😮
Ithu neraya peroda yearly salary da😢
Which company you are working Balaji ?
Bro unga suggestion la nifty lager Midcap 250 la sip start pannitan…… thank you for it… and oru small cap fund for sip ( long time) ku suggest pannuga bro🙏
Bro investment ku best app solluga for students exactly groww vs angalone ..... Video podugaa pls I am confused 😕
per day sip pota ??monthly 22 days market working days 8 days leave aguthey bro... daily sip vida monthly sip tha best i think...
Can please do a video on hybrid funds bro ?
🎉🎉🎉
Bro , tata param rakshak pro solution
What do u think about this plan bro
It's good to have both insurance & invest in market together
Or
To ,buy a term insurance
&
Invest in market invest in separately
Bro interest madum withdraw panni thirupa investment panna loss irrukathula bro
s&p 500 gave 10% returns in last 20 years
but that is in usd
what about in inr?
because inr is weakening against usd every year
if possible make a separate video on s&p 500 return percentage in inr
Bro 2024 best sip and minnimam balance 500₹ la sollunka
40years investment journey la 25 crores screen la therija nalla irukum but 41 st year market 40% down aana avar mana nilai epdi irukum
40years experience coola irupaara
40% loss heart attack varuma
❤❤❤
Hi Boosan, Thanks for your Informative videos, I'm new to the investment world, i have a demat account from India but I am an NRI should i continue using the same account for investment or I need to conver the demat account to NRI demat account, by coverting what are the befinits I will get and what will I lose, could you please share you experience and thought about it. It be will really helpful if you could make a video about it. Cheers 👍
Thank you for your feedback.
I'm currently working on NRI video, will be published very soon.
Hi boosan, If we are investing 3 different MF instead of 1 MF which may chance affect compounding ?
No it is good 👍
What your views on ppf boosan bro??
Hi bro I have a question. Could you please clarify if investing a portion of my monthly salary, around 5000 to 8000 Rs, in the Quant ELSS Tax Saver Fund Direct Growth Mutual Fund is a good choice? Are there any better alternatives? I have idea to started my SIP in this fund. please share you opinion
Hi boosan bro. I hv activated my account on zerodha kite today
Kindly put video on midsmallcap 400 momentum quality 100 index
❤