A new dance move?
Maybe, if you learn it right, you could be tapping away on your happy feet.
Doing the roll and grow is Miss Kaya’s investment philosophy; investing with patience and commitment.
So how does this Roll and Grow work?
It’s all about the compounding of money – or when you earn compound interest in investing, saving, or other forms.
Let’s say you decide to take $1000 and invest it for just 1 year, with an interest rate of 5% per year, compounded annually. At the end of the year, your small ball of money would have rolled down a bit, accumulating some light snow on the outside and becoming $1051.16, when you stopped the ball.
Well all that’ll do is get me a nice dinner.
We do know it’s more than enough to account for the usual 2% inflation, so your money is actually growing. But you’re right, it’s not really that much of an increase in one year.
But what if you let the ball continue rolling? Imagine how much snow would have attached itself. How big would it have gotten? In two years, it would be $1104.94. In five years, $1283.36. In ten years, $1647.01. Nice. In fifty long years, it would be $12,119.38.
You just said WHAT?
You heard us right. $1000 dollars can keep rolling and growing, and become more than $12,000 in fifty years. 1K to 12K. Yup you heard us.
This is crazy. I want to know more.
We’re glad you asked. Understand the enormity of compounding by taking a look at these numbers for a 5% annual interest rate:
Remember how big a ball can grow over time. Although it’s small in the beginning, it’ll be amazingly huge over many, many years. That’s the key to investing, don’t take your money out of your account once you’ve made some money. The goal is to compound your interest and let your money work for you.
So anyone thinking roll and grow all day, every day?