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Anonymous
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?
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Chris
12 Jan 2021
Owner and Writer at Tortoisemoney.com
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.
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Doesn't make sense, cannot compound if you do that, will hurt your returns in the long run. Need to separate between investment and trading, if it's investment then keep it there long term. If trading then by all means take profit