How compound interests and doubles work
Compounding is the most powerful force in the universe I believe Einstein once said.
How it works is say you had a 100% annual return, quite high by many standards and you compounded it year by year. Well your $1000 after year 1 would be $2000. After year two the $2000 is now $4000 (two doubles) by year 3 $2000 becomes $4000 (three doubles) year 4 $8000 (3 doubles) etc. Year 10 would be 10 doubles $512,000 if your APY was 100% and on and on. If it was possible to maintain such a high APY for 40 years (no one has pulled this off) your $1000 would be two hundred twenty-nine quintillion thirty-eight quadrillion one hundred ninety trillion value. “ 2.2903819E+20 ”. Notice HOW JUST the tail end of that number is 190 trillion. More than the entire world has in money flowing around. That is the theoretical power of compound interest.
How it works is say you had a 100% annual return, quite high by many standards and you compounded it year by year. Well your $1000 after year 1 would be $2000. After year two the $2000 is now $4000 (two doubles) by year 3 $2000 becomes $4000 (three doubles) year 4 $8000 (3 doubles) etc. Year 10 would be 10 doubles $512,000 if your APY was 100% and on and on. If it was possible to maintain such a high APY for 40 years (no one has pulled this off) your $1000 would be two hundred twenty-nine quintillion thirty-eight quadrillion one hundred ninety trillion value. “ 2.2903819E+20 ”. Notice HOW JUST the tail end of that number is 190 trillion. More than the entire world has in money flowing around. That is the theoretical power of compound interest.
Why buying timing matters
So let's say you saw a Crypto at $0.01 (one cent) and you bought it with $1000. If the price soared to $1.00 per coin, then you would have 100x your money ($100,000) .
Now, say you bought the same coin at $0.03 (3 cents) instead and then the price went to $1.00. Your $1000 would get a 33x instead ($33,000) instead a 100x.
So even though $0.01 and $0.03 are only 2 cents apart, the compound effect difference is huge.
Now Im not saying buying at $0.01 is an easy feat, or something you should fret about. But, you should do your best to get an entry that is as low as possible and use the metrics I share in this course to time your buying entry better. In the long run, buying Bitcoin at any price in 2021-2023 will be profitable in 10 years, but timing your entry to be in the lower ranges will greatly increase your returns in the long run.
Now, say you bought the same coin at $0.03 (3 cents) instead and then the price went to $1.00. Your $1000 would get a 33x instead ($33,000) instead a 100x.
So even though $0.01 and $0.03 are only 2 cents apart, the compound effect difference is huge.
Now Im not saying buying at $0.01 is an easy feat, or something you should fret about. But, you should do your best to get an entry that is as low as possible and use the metrics I share in this course to time your buying entry better. In the long run, buying Bitcoin at any price in 2021-2023 will be profitable in 10 years, but timing your entry to be in the lower ranges will greatly increase your returns in the long run.