Einstein described compounding interest as the 8th wonder of the world and very few people understand how powerful it can be. In 10 Minute Shares it forms a basis for regular investing which when dividends are reinvested makes it possible to generate incredible wealth within a 10 – 15 year time span.
2 charts are included in the book which show an initial investment of £2000 followed by £100 monthly investments with the compounding effect taking 15 years to become a millionaire. In the second chart an initial investment of £3000 is used again investing £100 per month. This time the investment gets to £1 million only 6 months sooner.
Starting with an investment of just £100 per month and every month thereafter will take just 8 months longer than the first chart to become a millionaire.
The benefit of the compounding effect shows that it is consistent investing which produces the best results.
With dividend investing the book show which are the best investment strategies to get the best returns. Monthly dividend shares using auto invest, can produce a much higher return than the traditional one or twice a year dividend.
Using a monthly dividend share with a yield of 7.7%, reinvesting the dividend over 12 months the return is 8.12%. The effect of reinvesting the dividend each month and earning dividends on dividends produces the higher return and shows how the combination of dividend investing with the compounding effect and explode results.
PCA is a beginner’s strategy producing capital growth and stands for Price Cost Averaging. Using PCA involves buying shares at the same time each month regardless of the price. Throughout a period of 12-18 months it produces a steady return of 5% capital growth.
Compounding the dividend yield of 8% and capital growth of 5% the investor has a growth of 13% per year.
The use of charts has long been a strategy for analysing shares and the book shows different types of charts which could be used include Line Charts; Candlestick Charts; Area Charts and OHLC Charts and when to use them.
Part of charting are the overlay tools which provide much more information on which to base a decision. The tools covered in the book are the use of Moving Averages and RSI (Resistance and Support Indicator)
The 10 Minute Shares book offers the absolute beginner a way to start investing in shares with some simple strategies which over time using the compounding effect together with dividend investing will provide the investor with a stable investment strategy to build wealth.
If you would like to learn more about 10 Minutes Shares – Simple Strategies to Make Money on the Share Market. The link will take you to YouTube where you can hear more about 10 Minute Shares from the author.