Asked 2w ago
What do you think of withdrawing daily earnings, let’s say today it increases $100 from the total investment, so i make that $100 withdrawal. And consecutively with small earnings. Can it work?
3 more comments
You can but it also means that you're preventing your money from compounding. Compounding works because your money can keep growing on itself and the gains with compound on themselves as well. By taking our your returns every day, you're hindering this process.
Take an example of $10,000 in a fund growing 10% per year for 40 years.
If you take the profit out every day, your investment will end up at $50,000 ($10,000 10% 40 years + initial $10,000).
However, if you allow your investment to compound for 40 years, your investment will total $452,592.56!
Don't unnecessarily interrupt the process of compounding. Compounding and time is the secret to building consistent growth in wealth.