'I always knew I was going to be rich. I don't think I ever doubted it for a minute'
---- Warren Buffett
Those are the famous words by one of the greatest legends ever in the world of investments and fund management. Most of us spend our life worrying about money. I have many friends & relatives who are coming close to retirement and they worry so much if they are going to have enough once they have to let go of their job and monthly income. And here we have someone who always knew that he was going to be rich, even before he became rich, much much before retirement, infact closer to his childhood years.
Warren Buffet today is one of the richest man on earth almost as far ahead of the second category of rich people as pluto from earth. Warren is so rich that he had to hire Bill & Melinda Gates to just donate all or most of his money away for charity and they happily accepted the responsibility with great pride. Warren also made several others filthy rich, friends, families, early contributors and a long list of loyal followers & investors. They are all millionaires.
It should be then interesting to figure out how Warren always knew that he would be so rich and successful in life way before he even achieved it. Who else can you think of had so much confidence? Edison, Newton never said that they always knew that they will be the greatest scientist, Steve Jobs never said that he always knew that he will be the greatest technologist, Gandhi never said that he always knew that he will the greatest peace messenger, you never say that we will be greatest parent ever. Then what gave Warren Buffet the confidence to say this?
The answer is simple
Simple compounding mathematics. Warren knew he had P amount in present (which is not rich) but he can compound it at 15-25% per annum forever from here by investing it. And using a simple formula he could easily see how much he will have as he keeps compounding his P year after year which would become F i.e Future value which after elapsed time t makes him super rich. He knew it and it worked out exactly how he knew it (few things here and there).
If you play around a little with this simple formula using different combinations of P and n, you will be amazed to see how it can transform some very small and humble number in present (P) to some really magnanimous number in future (F) given sufficient time (n)
Compounding formula from wiki
---- Warren Buffett
Those are the famous words by one of the greatest legends ever in the world of investments and fund management. Most of us spend our life worrying about money. I have many friends & relatives who are coming close to retirement and they worry so much if they are going to have enough once they have to let go of their job and monthly income. And here we have someone who always knew that he was going to be rich, even before he became rich, much much before retirement, infact closer to his childhood years.
Warren Buffet today is one of the richest man on earth almost as far ahead of the second category of rich people as pluto from earth. Warren is so rich that he had to hire Bill & Melinda Gates to just donate all or most of his money away for charity and they happily accepted the responsibility with great pride. Warren also made several others filthy rich, friends, families, early contributors and a long list of loyal followers & investors. They are all millionaires.
It should be then interesting to figure out how Warren always knew that he would be so rich and successful in life way before he even achieved it. Who else can you think of had so much confidence? Edison, Newton never said that they always knew that they will be the greatest scientist, Steve Jobs never said that he always knew that he will be the greatest technologist, Gandhi never said that he always knew that he will the greatest peace messenger, you never say that we will be greatest parent ever. Then what gave Warren Buffet the confidence to say this?
The answer is simple
Simple compounding mathematics. Warren knew he had P amount in present (which is not rich) but he can compound it at 15-25% per annum forever from here by investing it. And using a simple formula he could easily see how much he will have as he keeps compounding his P year after year which would become F i.e Future value which after elapsed time t makes him super rich. He knew it and it worked out exactly how he knew it (few things here and there).
If you play around a little with this simple formula using different combinations of P and n, you will be amazed to see how it can transform some very small and humble number in present (P) to some really magnanimous number in future (F) given sufficient time (n)
Compounding formula from wiki
I am a Warren Buffet fan!
Of all the many reasons, this is exactly why I became a fan of Warren Buffet. It is one thing to celebrate success for one day after slogging for years like the Edisons and Newtons and Steves of the world and It is a completely different thing to always know that you will be successful and make success a part of life instead of one moment or one event thing. This is where Warren Buffet is far ahead of everyone. He has a successful life and not a successful day or event to his credit. Life is all about inspiration and not material success and Warren Buffet inspires me the most.
Just look at him, he surely knew everything all along. That's the happiness on his face. So who is the one that inspires you in life? Do you also know if you are going to be rich or successful? trust me it is a good life to know in advance :)
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