Five years have past since the Real Estate Markets hit their point of resetting in 2010 from the 2007-2008 Great Real Estate Depression. Extremes in both individual human behavior and financial/credit modeling often cause financial losses and results in the ‘left behind’ mentality & reality. Looking back over the past 21 years of active investing in both real estate and the financial markets (stocks, bonds, & mutual funds), I am extremely grateful that I’ve adhered to a consistent mantra of value investing that doesn’t involve market timing, but continuous investment without over leverage and the capability to adjust to changes in market conditions.
The most compelling case is so simple – “The Power of Compounding” over time.
To quote an Institution that almost all respect, Vanguard Investments states:
If you’re patient and disciplined, your money can work for you and make a real difference in your account balance over time.
“The key is the power of compounding, the snowball effect that happens when your earnings generate even more earnings. You receive interest not only on your original investments, but also on any interest, dividends, and capital gains that accumulate—so your money can grow faster and faster as the years roll on…”
Here is one of my thoughts on compounding regarding a story where I’m meeting the seller who providing financing this month as the notes are paid in full: The Power of Compounding with Rentals.
Love this Graph just showing an initial investment of $6.11!
Ok -so enough with all the quotes huh… My point is that this really works