| What is the best investment? If we reflect on this | | | | that is as safe as a bank term deposit, but that has |
| question soberly and actually really try to define this | | | | a return of say 100% per year, (which would make |
| mythical creature in the best of all possible light, it | | | | one rich very rapidly) This would be designated as |
| would have to be an investment that has a high | | | | the best investment in history or the ideal |
| return and zero risk. Let's look a little closer at this | | | | investment. |
| thing, the best, ideal investment, because if we can | | | | A $100 dollars turns into $1.4 million if you doubled it |
| define it better, we can maybe start looking to see if | | | | just 14 times or applied 100% compounded. That is |
| we can indeed find one. | | | | why doubling your money is such a holy grail. To |
| Most investors use the humble bank deposit as a | | | | double your money you are stretching at the way |
| benchmark to compare all other investments. The | | | | upper limits of sanity, but still within the realm of |
| reason why the bank deposit is seen as the be all | | | | possible. Here is a clue. Here is the essential to |
| bench mark is because it is considered the safest | | | | doubling your money but maintaining the required |
| place to put ones money and also, by default the | | | | safety of actually getting your money back. |
| least likely to make you rich. | | | | Whenever you invest with such ambitious goals of |
| Indeed a return in the single digits, where the typical | | | | doubling your money, you must secure assets equal |
| overnight cash rate is around 7% historically, one can | | | | to in value equal to the value of your investment. It |
| expect to wait several hundred years before their | | | | is as simple as that. If you maintain that rule in all |
| seed capital would approach anything near what | | | | your investments you may be as ambitious as you |
| would be considered as wealth. | | | | wish with your compounding goals and never fear |
| So theoretically, if we can find another investment | | | | the risk factor. |