Do you think that hard work makes you richer than a rickshaw puller who work hard on the road or a construction worker working the same means that only hard work is not enough to achieve life goals What we need more than this is that all these examples are sources of active income and active income only exists as long as we work.
So, we need to think cleverly and adopt a new way of earning when we do not work which is passive income. Today the rate of inflation continues to increase and the source of income is limited.
Compounding's principalCompound interest is nothing but reinvestment of interest at the same rate investment and interest income also generates an additional return of compound interest.
The Law of CompoundingStart investing as soon as possible and give time to your investment. Investing starts with your first earnings, then no matter how small the amount of investment may be, it can be small but after some time a small amount can be made into a large amount Can be changed. The compounding effect works so the sooner you start your investment, the more time it will take for your money to grow.
Market instruments for investmentThe investment in Understand Finance of Most people prefer a savings account, recurring deposit (RD), fixed deposit (FD) or some government approved scheme or bonds in a secured instrument. Money is not bad in a single financial instrument and the approach.
How to use compounding power
Understanding the business model
Don't put all the eggs in one basket.
Update your knowledge
While it is always recommended to get knowledge and experience before investing, the best strategy for investing is to start with a small amount when you understand that the basic concept can increase investment.