Compounding & Time

Longevity in the market is key. But so is duplication. If you buy three investment-grade properties worth $500,000 each and hold them for 10 years each, at the end of that period, they could be valued at double their original purchase price if the average annual growth rate was seven per cent.

Your $1.5 million investment could have turned into a $3 million one – with the passage of time being one of the main drivers of that growth. And if you held them for a further 5 years your investment portfolio could be worth almost 50% more – possibly another $1.5 million.

Fact is that when you look at the financial positon of successful investors when they retire, you’ll find most of their asset base isn’t money they saved, or rent they received or the mortgage they paid off.

The bulk of their wealth is capital growth which arose from the power of compounding.