What are the problems relating to compounding your money for a long period of time ?

[JackofTrades8]

Hi All ,

I am 25 years old who stumbled upon the concept of "compound interest" .
So , just like everyone would've , i picked up my calculator and calculated that .
if we start with 100,000
invest 100,000 every year
grow it at 25%
at end of 30 years we get in like 41 crores or so .

My question is . has anyone done this in the past ? and if so , what are the problems one faces while doing something like this ?

P.S: i've read almost all of this forum and seen that skilled traders seem to make 10% on an average per month . So , I'm hoping for a person who is qualified in identifying fundamentally strong companies 25% a year shouldnt be a problem .

 

[Subhadip]

Re: What are the problems relating to compounding your money for a long period of tim

Compounding is the Eighth wonder.

Enjoy...

 

[JackofTrades8]

Re: What are the problems relating to compounding your money for a long period of tim

Compounding is the Eighth wonder.

Enjoy...

Haha . Sir good to know that the question that I asked almost a year back finally got some response .
Little did I know there were people who think similar to me , I always thought people look only at making 10-20% p.m or 100% y.o.y

Loving ur thread ,
Path to consistency ,
Jack of Trades

 

[vagar11]

Re: What are the problems relating to compounding your money for a long period of tim

Hi All ,

I am 25 years old who stumbled upon the concept of "compound interest" .
So , just like everyone would've , i picked up my calculator and calculated that .
if we start with 100,000
invest 100,000 every year
grow it at 25%
at end of 30 years we get in like 41 crores or so .

My question is . has anyone done this in the past ? and if so , what are the problems one faces while doing something like this ?

P.S: i've read almost all of this forum and seen that skilled traders seem to make 10% on an average per month . So , I'm hoping for a person who is qualified in identifying fundamentally strong companies 25% a year shouldnt be a problem .

Who will pay the 30% tax ?

Betting all the money that you made through out your life on the next trades is not easy.

 

[howardroark]

Re: What are the problems relating to compounding your money for a long period of tim

Hi All ,

I am 25 years old who stumbled upon the concept of "compound interest" .
So , just like everyone would've , i picked up my calculator and calculated that .
if we start with 100,000
invest 100,000 every year
grow it at 25%
at end of 30 years we get in like 41 crores or so .

My question is . has anyone done this in the past ? and if so , what are the problems one faces while doing something like this ?

P.S: i've read almost all of this forum and seen that skilled traders seem to make 10% on an average per month . So , I'm hoping for a person who is qualified in identifying fundamentally strong companies 25% a year shouldnt be a problem .

Hi.
I do not know about FnO or stocks or MCX ...
But I'm doing it successfully in FX ...
IT IS POSSIBLE IN FX, provided one knows how to implement the Compounding strategy vis-a-vis money management / Risk Profiling ...

 

[doonyadav]

Re: What are the problems relating to compounding your money for a long period of tim

25% return year after year is very difficult but 10-15% makes some logic.
Discipline is the key to wealth creation. I myself is doing this, though started in very late stage of my life.

 

[hir0406]

Re: What are the problems relating to compounding your money for a long period of tim

Hi All ,

I am 25 years old who stumbled upon the concept of "compound interest" .
So , just like everyone would've , i picked up my calculator and calculated that .
if we start with 100,000
invest 100,000 every year
grow it at 25%
at end of 30 years we get in like 41 crores or so .

My question is . has anyone done this in the past ? and if so , what are the problems one faces while doing something like this ?

P.S: i've read almost all of this forum and seen that skilled traders seem to make 10% on an average per month . So , I'm hoping for a person who is qualified in identifying fundamentally strong companies 25% a year shouldnt be a problem .

Anyone who says​ it's possible ask them to show some proof that they have done it over and over again. It is very very difficult to increase lot size even though if your balance is increasing. Specially​ in Forex who claims that he or she has done ask them to show myfxbook or mql5 signal page they will run away from you . To trade 1-2-3 lots size that's normal if you have good balance but even with huge balance to trade 20-30-40 lots is very very difficult. If it's not your own money it can be possible but if it's your own money then it's not easy...
So compounding lot size is not easy manually but it can be done only with Robo trading.

Sent from my MI 4W using Tapatalk

 

[PPM]

Re: What are the problems relating to compounding your money for a long period of tim

Hi All ,

I am 25 years old who stumbled upon the concept of "compound interest" .
So , just like everyone would've , i picked up my calculator and calculated that .
if we start with 100,000
invest 100,000 every year
grow it at 25%
at end of 30 years we get in like 41 crores or so .

My question is . has anyone done this in the past ? and if so , what are the problems one faces while doing something like this ?

P.S: i've read almost all of this forum and seen that skilled traders seem to make 10% on an average per month . So , I'm hoping for a person who is qualified in identifying fundamentally strong companies 25% a year shouldnt be a problem .

In trading its extremely difficult to scale up... 1 to 2 to 4 to 10 lots is ok... thereafter things turn extremely difficult.

However in long term investing its very much possible... Equity investment is profitable and highly scalable. Stock picking requires some analysis but finding stocks that will be able to provide 20-25% return in a yr is not that difficult. Jhunjhunwalas and Damanis have built up the wealth in more or less the same way (they do trading too..however major amt is used for investing).

One thing that is required for this is risk appetite. During a downturn patience of everyone gets severely tested. In a downturn you must hedge your portfolio with sufficient number of puts or futures matching the delta with that of your portfolio which is easier said than done.

Mutual funds do the hedging part well but they are constrained by their mandate which requires them to allocate the money strictly according to scheme rules. And they usually overdiversify to reduce the risk of sharp temporary drop in Navs. This overdiworsification leads to worsening of their performance.

 

[pannet1]

Re: What are the problems relating to compounding your money for a long period of tim

In trading its extremely difficult to scale up... 1 to 2 to 4 to 10 lots is ok... thereafter things turn extremely difficult.

However in long term investing its very much possible... Equity investment is profitable and highly scalable. Stock picking requires some analysis but finding stocks that will be able to provide 20-25% return in a yr is not that difficult. Jhunjhunwalas and Damanis have built up the wealth in more or less the same way (they do trading too..however major amt is used for investing).

One thing that is required for this is risk appetite. During a downturn patience of everyone gets severely tested. In a downturn you must hedge your portfolio with sufficient number of puts or futures matching the delta with that of your portfolio which is easier said than done.

Mutual funds do the hedging part well but they are constrained by their mandate which requires them to allocate the money strictly according to scheme rules. And they usually overdiversify to reduce the risk of sharp temporary drop in Navs. This overdiworsification leads to worsening of their performance.

Well everyone are not Jhunjhunwalas and Damanis. Could you please share you wisdom with some examples from your experience so Jack and all others can benefit.

 

[tradertrader]

Re: What are the problems relating to compounding your money for a long period of tim

Patience & discipline. Nothing is impossible but the day you get these two characteristic you can do. I have tried it and got successful then failed many times too. Because that was not right time for me. But I worked hard to found reason of failure and found till I wont broke my rules I am on my goal. And after That I worked hard on Elliot wave structures more thoroughly and now better and on my way. My goal is daily 2% If I be successful this time I thin great achievement for me.My main reason for earlier failure was over leveraging, over trading after making huge money in a day. My last trade doomed many time my whole day profit. Though I made 500% in 6 month international and some commission issue with my client. But after that restarted with own saved money and now happy. I think if you want to be good focused professional trader lern elliot wave properly atleast guideliness. Currently associated with one senior analyst of SSJ finance and cross checking his picks which given me more confidence. If you be with patience and disclipline with knowledge of trading with genuine expectation you can do it. No need to run behind profit better run behind good trade money will chase you. Well whether Jhunjhunwala or Damani every one lose but their ratio of wining trade is better. Secondly many such product are time of Arshat Mehta time. I personally knew 1-2 firm who get rich that period. I have seen few of their interviews and came to conclusion whether billion $ firm or retail doomed when they broke their rules. Personal view no offense. Trading seem easy money but not in reality for every one but yes for them who are disciplined.