Effect of Consistent Compounding on the lifetime return of investors.

 Say, we have 3 brothers Joshua, Buffet and Soros who are investor and would invest over the horizon of 40 years. 

All three of them have just inherited 1 million from their grandfather recently. 

Joshua is a stock investor and hope to gain a consistent average profit of 10 percent per  year over his lifetime. At 10 percent return per year, his 1 million will become 64 millions in 42 years of investment.

Buffet on the other hand is more selective in his investment and only invest in high grade stock with average consistent annual return of 20 percent. His 1 million will become 4 billion in 42 years of investment. 

Soros on the other hand is a speculator and he speculate on high risk stock with average consistent annual return of 40 percent. His 1 million will become 4 trillion in 42 years of investment.

This show the magic of compounding on the lives of 3 types of investor. Which investor are you? Joshua? Buffet? or Soros? 

Moral of the story is If you take care of your losses the profit will take care of itself. 

God bless, 

Dr. Lion.