The masses tend to fail to get wealthy. This is true in the developed countries along with the developing world. No matter where you go, the ability to generate wealth remains elusive for most.
A lot of this stems from the consumerism mindset, especially in the developed world. People simply cannot control their spending. They need the latest and greatest. "Keeping up with the Jonses" is a pastime.
That aside, there are still issues when it comes to the revenue. People fail to embrace those steps which lead to wealth over time.
Compound interest is a simple concept. It is basically rate of return spread over time. The key is time.
Of course, what is being described here is not sexy. However, it does add up over time.
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SPInvest
We now see SPInvest, one of the earlier projects of this sort on Hive, celebrate 4 years. I was fortunate enough to get into early and at a decent level.
Since that time, once dividends started to be distributed, I simply sit back and collect. At present, I believe I get roughly 30 HIVE each week. Obviously, this is not something that is going to affect my life directly.
However, here is where building wealth is boring. SPI offers a very good return. Over a year, I get roughly 1,500 HIVE. If we extend this out over a decade, we are looking at 15K.
Now let us convert this to USD. Right now, the 30 HIVE is worth around $10. That is $500 per year. Again, over the course of a decade, we have $5,000.
Not a bad return at all.
Things get even more interesting if the price of that coin reaches $2. We then are looking at $30K over the course of a decade.
Considering the US dollar investment was well below this level, it is going to be a fantastic compounded return.
Avoid Excitement
Warren Buffett might be the most successful boring investor of all time. He applied the principle of compounding to his holdings over half a century. This is why he has a company is one of the best known in the world.
It seems that most approach investing like they do a sporting event. For them, excitement is the key. This is where speculation seems to rule the day. Everyone wants the get rich quick idea. Unfortunately, for most, this is a path to failure.
How many are attracted to the action of trading? Contrast this with how many are actually successful at it.
The reality is most lose money. They do not take solid wealth building steps. Instead, they approach markets like it is a casino, betting on either red or black.
Just like in Vegas, the house always wins.
Those who approach investments from the perspective of 10 or even 20 years will end up doing better than the average person. It starts with controlling one's spending. After that, it is necessary to start receiving a steady return. Compounding this over time can really add up.
Sadly, this is not what the masses do. Instead, they are drawn to excitement and the ability "live on the edge". This is not a great approach when dealing with one's financial future.
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