Sweet Compounding

Earning more money is certainly a way to speed up compounding effects.

It is the primary way, as without sufficient starting figures, the growth will take far longer than a person's life to make them rich.

But Time is the most important variable.

Rich people do not just end their lives rich...they live their lives rich. They do not rely on time as much as large stores of money that they have. Ie, they are rich already.

In other words, a poor person cannot become rich by exploiting compound interest.

If you invest small amounts of money in ultra-low cost investment vehicles every year over, say, 30 years, compounding can build you a gigantic nest egg.

For "not rich" people, you would also have to dedicate not only a sufficient portion of their available money, you would have to put them in stasis.

Face it, you cannot make a poor person rich, even if rich people think it is all a matter of compounding.

You simply need to start with more money than most people would have and you need to have investment opportunities that most people do not have.

/r/Frugal Thread Parent Link - gilbertindex.com