Jellyman Investing - Personal Finance for Australians
Business:Investing
https://www.patreon.com/Jellyman_Investing
There was once a king who was to pay a farmer for his work. He asked how much he'd like to get paid. The farmer replied saying, place two coins on the first square of the chess board. Then double the number of coins when you go from one square to the next.
First there was 2, then 4, then 8 and so on. Can you guess how many coins there are by the time he reaches the end of the chess board?
Before I get on with this episode, a reminder that I have a Patreon page where you can read articles, download spreadsheets, get internet resources, watch tutorial videos and even chat with me. It's free to join so sign up today. The link is:
Patreon.com/Jellyman_Investing
Also, a disclaimer, that I am not a financial advisor, please consult with a professional before making any financial decisions. On with the episode.
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The article explains compound growth, a key concept in investing where money earns more money, eventually outpacing expenses and leading to financial freedom. This can be achieved through various investment avenues like stocks, index funds, real estate, or business ownership.
The concept is similar to how credit card interest works. If only minimal payments are made, the interest accumulates, leading to an ever-increasing debt. This compounding effect can turn a small debt into a large one over time, illustrating how banks make money and the dangers of credit card debt.
The article then applies this concept to investing. For instance, investing in a company like Apple allows the investor to benefit from the company's growth, which in turn increases the investment's value. The goal for long-term investors is to have investments that grow more than their annual expenses.
An example is provided to illustrate this: investing $1M in stocks that grow by 10% annually. By withdrawing $100k each year, the investor maintains the principal amount while benefiting from the growth.
The article emphasizes the power of compound growth and how even a small change in the growth rate can significantly impact the investment's final value. It also highlights the importance of choosing the right investment vehicles, like superannuation funds with minimal fees, as small differences can lead to substantial gains or losses over time.
Finally, the article promises to explore further topics like investment choices, risk assessment, and the role of age in investment strategies in future discussions.
S01_E20 - Basic Principals of Investing in Individual Companies
S01_E19 - Variable vs Fixed Mortgage Structures
S01_E18 - Understanding the Role of a Broker in First-Time Property Purchases
S01_E17 - Building 6-12 Months of Savings and Buying your First Home
S01_E16 - Understanding the Tax System for Financial Independence
S01_E15 - The Biggest Money Fears and What to do about them
S01_E14 - How Much Do I Need to Retire - Part 2
S01_E13 - How Much Do I Need To Retire - Part 1
S01_E12 - Retirement Planning - Superannuation as a Back Up
S01_E11 - A 9-5 Job will never make you rich
S01_E10 - Building a Wealth Strategy - Debt, Housing, Investing, Economy
S01_E09 - Welcome to my Patreon
S01_E08 - Good Debt and Bad Debt
S01_E07 - The Gold at the End of the Rainbow
S01_E05 - Tips on How to Save
S01_E04 - Willpower and Structuring your Accounts
S01_E03 - Debt, Credit Cards and Personal Loans
S01_E02 - Developing your Money Mindset and Forgiving your Past Self
S01_E01 - Welcome to Jellyman Investing
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