As much as I dislike seemingly knee-jerk contrary statements against “known-good” knowledge, I feel that there is an important point here: aggressively attempting to compound interest is a poor use of time when you only have, say, hundreds of dollars. Better to focus on compound interest “in the background” while optimizing for growing capital or income-generating skills.
So, essentially: compound interest is something wealthy people are good at because it's useful when you are wealthy. Not because learning about compund interest will make you rich?
Yes, it’s vastly easier even Buffet says so. He only started really using compounding has his core strategy when he already had his first billion (he was 60). Then his fortune doubled a few times in the space of 20 years. People can search YouTube for the interview.
This is so true. I invested what little money I had to spare in music. Everything I made with it went back in. The return is more than I would have gotten from interest or things like stocks and bonds.
~2% is great if you're doing okay financially and have a good career. It's useless if you have any marketable skill that would benefit from spending what you can spare on tools or services. A pair of good mixing headphones in 2017 paid for itself by 2018. It would have only been an extra $2 in a savings account. That investment paid for a MIDI controller that came with Ableton Live Lite. That helped pay for an upgrade to Suite during a sale less than a year later.
All the money I spent on the controller and Suite upgrade would amount to barely $30 a year in savings interest. That's not going to help me with the tiny but still greater income built on those investments.
This is in line with the point of the original comment, which wasn’t just about investing money. That comment mentions self-development but it’s the general principle of reinvesting gains in something that is increasing in value.
In your case you are reinvesting gains from your music career back into your music career which is currently increasing in value. The principle is that this will let your career grow at increasing rates.
