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Eighth Wonder of The World
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MaichBlack
#1 Posted : Monday, May 05, 2014 12:48:53 PM
Rank: Elder

Joined: 7/22/2009
Posts: 7,836
I know I am preaching to the choir here but I will do it anyway because there might be a few who are not converted yet.

Invest and Re-invest your earnings

Many invest, few re-invest. My message to the "non-believers" today is start reinvesting your earnings/dividends/bonuses/wind fall income etc. and experience the power of compounding. Look at these money not as fruits but seeds.

Motivation for this thread: Every time it's dividend payment time, very many wazuans start talking/implying how they will spend their dividends and I can't help but wonder, are these fruits or seeds?

But it all depends on the stage of investment you are in. At one point you have to sit kivulini and "eat" mali yako. If you started investing the same period as @guka, by all means enjoy the fruits of your hardwork. The rest, re-invest!
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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MaichBlack
#2 Posted : Monday, May 05, 2014 1:03:01 PM
Rank: Elder

Joined: 7/22/2009
Posts: 7,836
A certain fellow you might have heard of called Albert Einstein said and I quote:

"Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it."

Einstein also believed that compound interest is "the greatest mathematical discovery of all time".
Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Fyatu
#3 Posted : Monday, May 05, 2014 4:04:12 PM
Rank: Veteran

Joined: 1/20/2011
Posts: 1,820
Location: Nakuru
sound advice @Maichblack...
Dumb money becomes dumb only when it listens to smart money
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Sufficiently Philanga....thropic
#4 Posted : Monday, May 05, 2014 4:55:46 PM
Rank: Elder

Joined: 9/23/2010
Posts: 2,225
Location: Sundowner,Amboseli
Great advice @Maichblack. I can see you have take over from where @mzeeyoung left!
@SufficientlyP
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Kingotore
#5 Posted : Monday, May 05, 2014 8:19:23 PM
Rank: New-farer

Joined: 12/27/2013
Posts: 87
Good advice.
GOOD TO GREAT. KINGOTORE
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murchr
#6 Posted : Tuesday, May 06, 2014 5:10:52 AM
Rank: Elder

Joined: 2/26/2012
Posts: 15,980
Compounding interest is a double edged sword, good if you are into saving money but cruel if you are the borrower. The longer money compounds the faster it grows.

You can approximately tell when you will double your money by using the rule 72. For example if you have Kes 100 which is earning 10% annually interest you're bound to double your money after 7yrs 2 months or there about. Test that using your scientific calculator log(2)/log(1.1)= 7.3 Years

If your earning a compound interest of 6% annually then you are bound to double your money after 72/6 = 12 Years. Test that log(2)/log(1.06)=11.9 Years

For low interest rates the rule of 72 slightly over estimates the time you will double your money and for high interest rates the rule slightly under estimates the time you will double your money
"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
.
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Mukiri
#7 Posted : Tuesday, May 06, 2014 7:13:48 AM
Rank: Elder

Joined: 7/11/2012
Posts: 5,222
Applause Applause Applause @MaichBlack

Sound advice there. I've always wondered with people who put money in the bank, money that should be making you more money! I've been fighting my chama on this.

Second is salaried employees who look forward to their salaries so that they can spend it! If you are paying rent from your salary, you are a slaveSad

Proverbs 19:21
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mkeiy
#8 Posted : Tuesday, May 06, 2014 9:21:06 AM
Rank: Member

Joined: 1/27/2012
Posts: 851
Location: Nairobi
Mukiri wrote:
Applause Applause Applause @MaichBlack

Sound advice there. I've always wondered with people who put money in the bank, money that should be making you more money! I've been fighting my chama on this.

Second is salaried employees who look forward to their salaries so that they can spend it! If you are paying rent from your salary, you are a slaveSad


It's war time on that front.
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jawgey
#9 Posted : Tuesday, May 06, 2014 10:03:16 AM
Rank: Member

Joined: 1/13/2014
Posts: 398
Location: Denmark
Am getting great inspiration from this thread.. but just wondering from a layman's perspective, what makes sense if an investment gives you good earnings in the short-term? After all, bird in the hand is worth two in the bush.I guess it's only prudent to cash out and probably wait for another season to get back..
Seeing is believing
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shalishali
#10 Posted : Tuesday, May 06, 2014 11:28:50 AM
Rank: Member

Joined: 12/15/2009
Posts: 142
Location: Nairobi
Mukiri wrote:
Applause Applause Applause @MaichBlack

Sound advice there. I've always wondered with people who put money in the bank, money that should be making you more money! I've been fighting my chama on this.

Second is salaried employees who look forward to their salaries so that they can spend it! If you are paying rent from your salary, you are a slaveSad

hapo you have really caught some of us!
UKITAFUTA UKABILA UTAKUFA BILA!
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