How Compound Interest ACTUALLY Works on Investments
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- Опубликовано: 10 июл 2024
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I'm currently almost at 1 year mark, 39 more to go.
You can do it!
well your advice works for me Jubair keep up the good work have a great weekend
Not advice 😅, but thanks Dean! You too
Yes but please tell me where should I put my money in side of trading 212? ISA and where please ?
I can't tell you what to invest in unfortunately
Would dividends also play a part in this? Anything I get is reinvested so surely that will also help with the compounding as it adds to the portfolio value and also the dividend amount increases the more shares are owned in any given stock? I realise of course the yield can decrease as well as increase at any point
Yes, dividends will further add to the compounding.
I just need to get on with it and open a ISA.
Only when you're ready!
@@Dr.JubairsFinance I think its time i have 0 debt and im about 20% cash.
Hai Jubair, I have a doubt regarding the self assessment, If i invest in the portfolio in Trading 212. Do I have to do the self assessment at the end of the financial year.
Best to consult an accountant, but usually if you make more than £3,000 in capital gains, or £500 in dividends or over £1000 in interest (basic rate), then you have to fill in a self assessment.
@@Dr.JubairsFinance thanks 😊
@@Dr.JubairsFinancewhat if you don’t sell anything at all
If you don't sell, you can still make money from Dividends though, so it's best to go through an accountant if you exceed your personal allowances
Silly question but aren’t savings and investments different things? I understand where compound interest applies to savings but I don’t see it applies to investments I.e. stocks and shares. Or am I missing something?
Technically stocks don't receive compound interest, but they can benefit from compounding value. So essentially the return on the principal amount can be considered the interest. If a stock grows by 5% each year and it's not withdrawn, then it will behave similarly to a bank account that pays the same amount (minus fees). I hope this helps
@@Dr.JubairsFinance thanks for answering my question. I thought I was missing something, but you have confirmed my understanding of the term, and and that, in my view, CI doesn’t really apply to shares.
@@stevesmart2545it absolutely does apply to shares for the reasons discussed above. CI is just when money made starts making money, which is absolutely the same as receiving interest. Stick it in a calculator it's exactly the same formula.
For example you have a stock that grows at 10% per year. You pay £100 for it. At the end of year one it's £110. At the end of year two though it's worth £121, year three £133.10 - it's not £10 per year it's compounding.
Thanks Steve for the clarification!
Your T212 ISA appears to be all in cash and committed to a trade. Out of interest (pun intended), what is that? You're not trying to time the market are you ;)
It's actually all invested now. Nice pun. I am human at the end of the day, I get excited with new market highs, I try my best to stay on course. One of the reasons why I made this channel!
Misleading thumbnail.
Start with £10k, deposit £500 per month for 30-40 years, 1 million is definitely not out of the question. This was the point of the video. I'm sorry that you were mislead by it.
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You don't think with regular contributions and a good time span, you can't make an initial investment of £10k into £1m?