The Long-Term Investing Guide to Compounding Wealth

Описание: In this video I hope to demonstrate the importance of adopting a long-term mindset for investing success. Deep inside our brain lies a region called the amygdala which protects us from danger and gives us the sense of fear. It helped to keep us alive throughout our evolution but for short term trading it can work against us. A behaviour pattern of grabbing small profits and crystallising large losses may explain why 90% of day traders and short term investors lose money consistently. I’m a long term investor and I illustrate the effect of compounding and exponential growth using a simple thought experiment. I reveal three important Warren Buffett quote emphasising the benefits of long term investing. I reveal my own compounding journey and show how you can set up a portfolio of five FTSE 100 companies which would yield £1 a day in dividend income. When I achieved this amount it was the turning point and I knew I was going to continue with it for the long term. At the time of this video using this simple approach, my average dividend income has grown to £1056 a month or £34 per day.
My preferred strategy is to buy large successful companies mainly in the FTSE 100 and hold for the long term. Any dividends received are reinvested so they compound over time. I’ve been growing my dividend portfolio for over 13 years and I have a Stocks and Shares ISA using the Barclays Smart Investor Platform. In more recent years I’ve invested into Exchange Traded Funds for more diversification.
With dividend investing, the returns start off slowly but you need to persevere. When compounding kicks in you start to see exponential growth as the portfolio value as well as the passive income stream starts to accelerate. This strategy is one favoured by one of the greatest investors of all time, Warren Buffett. By sticking to it over the long term, we can increase our chances of beating inflation and eventually achieving financial independence and the ability to retire early.
The companies I mention in this video are Legal and General, Sainsbury’s, SSE, Vodafone and Unilever. I also mention the iShares FTSE 100 Exchange Traded Fund (ISF)

Disclaimer
The information presented on this channel and in these videos is for entertainment purposes only and is not financial advice. Your capital is at risk and the price of shares can go down and well as up. Investing in shares is not appropriate for everyone so please do your own research.