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Lessons on wealth accumulation from Warren Buffett

His skill is investing, but his secret is timing. That's how compound interest works"...

Compound interest is interest generated not only from the initial amount invested, but also from the interest of previous periods. Buffett once compared compound interest to a snowball rolling down a hillside. By the time we reached the bottom of the hill, the snowball had become much larger. “The secret is to have a very long hillside, which means starting very young or living very long,” he said.

Ordinary investors can also easily apply the power of compound interest.

“Start early, when you're as young as possible, and as long as you have a small amount of money, keep investing,” advises President David Rea of ​​investment consulting firm Salem Investment Counselors.

Buffett got an early start in his investing career, when he started buying stocks at age 11. However, after selling 3 shares of a company called Cities Service, Buffett sadly watched this stock increase in price. He learned an early lesson that it is difficult to predict when to buy a stock and when to sell.

Just like Buffett, individuals can enjoy financial rewards if they start young. “Becoming a millionaire is not a difficult task if you start early,” Mr. Klontz said.

In addition, according to Mr. Rea, investors can also learn many other experiences of Buffett such as: not panicking and maintaining investment even when the market goes up or down.

👉 Buy, hold and invest early