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The Snowball

22/11/2015

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Just get it rolling...

Investing is a bit like making a snowball and rolling it down a hill.

At first you are doing all the work, picking up snow and packing it on (saving and investing money). 

After a while, the ball starts to pick up more snow from the ground. You are still picking up and packing on snow, but the snowball is growing by itself as well (capital gains and reinvesting dividends/interest).

Eventually the ball is so big and is picking up so much snow from the ground that your efforts to pick up snow and pack it on are much less important: gravity and size are doing almost all the work (investment growth and interest/dividends are bigger than your contribution).

With investing, the process is measured in decades, so for the first few years it feels like nothing is happening.

​Stick at it though and you will end up with an out-of-control giant ball of snow :)
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    Ben Tanaka is a teacher living in Sendai, Japan.

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