When you are planning something on the personal finance level, it helps to have compounding mindset. For example, let’s say I put on 100$ month aside to the bank. And this way at the year end I get 1200$. And this money can later be used for investing into something different. If you get to save more money into the bank, then surely this can mean you make much better choices with money. So saving with compounding mindset is always helpful for long term plans. It can be a good option when you have small goals which needs some financial assistance. Do understand the fact that it’d be however harder to meet the higher financial goals.
How do you start compounding?
You have to start slow. If possible start from today. Make sure you put some money aside and let it grow. This money saved aside can help long term. And it can make a lot of good returns if you are investing into something tangible. So it all comes down to compounding. I have found that some of the time, compounding in sources such as mutual funds and real estate can surely help. Let;s say you invest into real estate and then keep the people on rent. This can create some financial benefit. You get some cashflow and this means you are on much better position when it comes to the growing money.
Is it hard?
Yes compounding is hard. The reason being you have to be consistent at the compounding. And the money has to be consistent there. You can’t just pretend to work on same salary and expect things to change. You have to make sure to add higher amount as your financial situation gets better. You may have to change job to do just that. This way you can do a lot better support for your existing money and saved funds. You need to make sure that compounding is done in the right direction. You can start with say savings account. Put some money aside and see how it grows over year if you do it consistently.
I am trying to get back on my finances with compounding money. If this works I am sure I’d be happily share my findings with you.
Image by Pixabay.
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