Warren Buffett and the Magic of Compound Interest

A small seed planted by an 11-year-old boy
In 1941, 11-year-old Warren Buffett bought his first stock with his older sister.
All he bought was 3 shares of Cities Service preferred stock for 114 dollars.
At the time, no one knew this small seed would grow into the largest tree of wealth in human history.
Young Buffett had a simple dream.
"Let's earn a little more each year." It was neither a flashy plan nor a grand goal.
He simply wanted to keep making slightly better investments, steadily.

In his 20s and 30s: The snowball starts rolling
In his mid-20s, Buffett started his own investment firm with 100,000 dollars.
When he said "My goal is a 15% annual return," people were unimpressed.
The reaction at the time was, "What's so great about a mere 15%?"
But Buffett quietly went his own way.
100,000 dollars became 1,000,000 dollars within a few years, and at 35 he was able to acquire a company called Berkshire Hathaway.
He was still regarded as merely "a good investor."

After his 40s: The explosion of compounding magic
The real magic began in his 40s.
At 40, Buffett's net worth was 25 million dollars.
He was quite rich, but not yet one of the world's wealthiest.
So what happened 10 years later, when he turned 50?
His net worth had reached 300 million dollars.
An increase of more than 10 times! Over the same period, the stock market rose only about 2-3 times.
Even more surprising things happened next.
When he turned 60, Buffett's net worth was 3.8 billion dollars.
Once again, an increase of more than 10 times.
Now people began to be surprised: "Huh? When did Buffett become so incredibly rich?"

A miracle made by time
There is something Buffett often says.
"99% of my wealth was made after age 65."
This statement shows the essence of compounding.
He had 28 billion dollars at 70, 50 billion dollars at 80, and now, past 90, he has wealth of more than 100 billion dollars.
Just like a small snowball rolling down a hill and becoming a giant snowball.

The amazing lessons of compounding
What can we learn from Buffett's story?
First, starting matters.
Because he started at 11, he was able to gain a long span of 90 years.
Second, consistency creates miracles.
It was possible because he kept investing without giving up along the way.
The most important thing is time.
Compounding grows exponentially as time passes.
That is exactly why most of Buffett's wealth was made in the last 20-30 years.
The magic of compounding you can start too
What if you, at 25, invested 500,000 won every month at a 10% annual return for 40 years?
It would become about 2.6 billion won.
Even though the money you put in is only 240 million won.
Buffett said this.
"Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, loses it."
The magic of compounding is not just for special people.
It is an opportunity open to everyone who makes time their friend and works steadily.

💡The important thing is to start now.💡
You too should practice with mock investing to achieve a 10% annual return
Don't recklessly jump straight into direct investing
If you lose 10%, earning just 10% gets you back to your principal, but
if you lose 50% you have to earn 100%, and if you lose 90% you have to earn 900%.
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