Who’s Hungry for Some Buffett?

This blog has been written by rebuildingsociety.com’s Non-Executive Risk Director, Steve Wallis. Steve brings a wealth of Financial Services experience, having previously worked as Head of Portfolio Management at Ferratum Group and Chief Risk Officer at Ferratum Bank as well as having also worked at payment processing company Elavon. Steve, is also a passionate advocate of P2P lending having been an early adopter and investor across a number of different platforms. Here Steve briefly explains compunding and the rule of 72.

Who’s Hungry for Some Buffett?

Now, the magic of compounding, or so Warren Buffett calls it – the eighth wonder of the world.

I would be very surprised if you haven’t heard of this man, the most famous investor on the planet.

There’s a fantastic documentary on Netflix called Being Warren Buffett which I would highly recommend you watch.

But back to compounding.

The rule of 72 states that if you invest an amount at 7.2% per annum interest, reinvest the interest instead of taking it out and spending it, after exactly 10 years you will have doubled the initial amount you started with.

Pretty impressive huh?

What I think is even more impressive is if you can double that 7.2% annual return and make it 14.4%, you will have doubled that starting pot in just over 5 years.

I wish I knew this when I was younger.

My parents’ investments have been limited to classic cars and their main residence, meaning I couldn’t find out about return on investment or interest rates and the ability to compound unless I was taught it in school or by a relative.

None of these things happened, maybe Rich Dad Poor Dad by Robert Kiyosake should be part of the curriculum…

This theme plus the others that really matter can be found in a Personal Finance 101 guide which is one of the three guides you’ll immediately receive upon becoming a Guerrilla Investors subscriber.

Details can be found here


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