Dividends Really Are Like Snowballs

snowballOur entire investing future is a product of three things:

(1) The amount of money we invest.

(2) The growth rate of our investment.

(3) The amount of time we allow an investment to grow.

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The higher we can get each of those three elements, the more we will have (note: I am not claiming that amassing the largest fortune should be your goal. It is all about utility. Warren Buffett used to joke that even a seemingly unassailable virtue like delayed gratification has its limits because, hey, you cannot save sex for old age. A $100,000 in the hands of a twenty-five year old could be much more valuable than $300,000 in the hands of an eighty year-old. The key to investing, and life in general, is finding the right calibration between satisfying your current and future self to the best of your ability).

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