Search Results for: external compounding

There exists an urban legend about Einstein. You’ve probably heard it before. Supposedly Einstein once said that “compound interest is the most powerful force in the universe.” It sounds pretty cool, and smart — like something Einstein might actually say. Whether Einstein actually said these words or not is subject to debate.

We’ll probably never know the truth about that Einstein quote, but the important part is the truth within it — Compound interest, or more generically “compounding” is an extremely powerful financial force when it works for you…

Living off passive income is a bit like spotting a snow leopard in the wild. Snow leopards are (of course) one of the most rare and elusive creatures on the planet. They live in the Himalayas at significant altitude (9,800 to 14,800 ft), and it’s estimated there’s less than 10,000 of these extremely rare cats alive today.

Seeing a snow leopard in the wild is exceedingly difficult. Hardly anyone ever sees them. Naturalists can spend months in the Himalayas looking, and never actually see one. Despite this fabled difficulty, it is actually possible to see a snow leopard in the wild…

Every year right around the end of January, I try to plan out my dividend income and capital allocation goals for the year. I started doing this in 2017, continued the process in 2018, and still find the process useful enough that I’m doing it again in 2019.

At the most basic level, my planning process amounts to putting excess cash to work from our Big Fat Cash Pile AND trying to put that cash into smart places that generate a growing stream of dividend income. The devil is in the details of course…

To a certain extent, investors like myself desire to see a steadily rising net worth. Up and only up please! Unfortunately, life and the stock market don’t always comply with what I want them to do.

There will be years where the market is down, and weeks when more cash flows out than flows in. So how do I know I’m actually building wealth?