Business and Personal Development

It’s wonderful to think that you may be able to invest $10,000 or $20,000 in something and then sit back while that investment makes you a million dollars or more. Perhaps that does actually happen from time to time when people get in on the ground floor of something spectacular, but the odds of you actually doing that are extremely small. Furthermore, do you really want to leave your financial future in the hands of something you have no control over, no involvement with and that has exceptionally long odds of success?

Learning how to choose the right investments takes decades

The next time you read about some investment advisor who makes a killing on the stock exchange or with some other type of investment, remind yourself that making money that way actually takes lots of hard work. Warren Buffett is widely considered to be one of the greatest investors of all time, but he is not an instant success story. Every time he makes an investment decision, he automatically brings to bear all of the know-how and experience he has garnered over a lifetime of investment activities. If you aspire to be as good as he is at investing, you’ll need to first invest 25 or 30 years learning how to choose your investments.

Compound interest doesn’t help over a short time frame

It is widely recognized that compound interest is a powerful force in wealth building. That’s very true, but keep in mind that the really impressive increases in wealth happen right at the end of the investment period. If you’re serious about generating a seven-figure net worth in seven years or less, that’s too short a time frame for compound interest to be much help.

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