The core is the long-term effect of "compound interest."

1. What is compound interest?

• Definition: Compound interest means making your "earnings also become the principal," continuing to generate new earnings, just like "money makes money, and money makes more money."

• In simple terms: Not only is the principal working, but the money earned also immediately joins the "working team," continuously rolling up the asset snowball.

2. Buffett's "snowball effect"

• Buffett likens compound interest to rolling a snowball: "Life is like rolling a snowball; the most important thing is to find wet snow and a long slope."

◦ Wet snow: A sufficiently high annual return rate.

◦ Long slope: A sufficiently long investment time.

• Formula:

\text{Future Value} = \text{Principal} \times (1 + \text{Annual Return})^{\text{Years}}

The longer the time, the more astonishing the compound interest effect.

3. Everything can be compound interest

Compound interest is not just for financial investments; it can also be applied in various dimensions of life:

• Investment compound interest: Hold quality assets for the long term, allowing assets to appreciate automatically (win while lying down).

• Cognitive compound interest: Continuous learning and accumulating knowledge, enhancing cognitive levels (become smarter).

• Mental compound interest: Maintain stable emotions and a healthy body, laying the foundation for long-term development (stay fit).

4. Buffett's advice $BTC

"You don't need to be exceptionally smart; you just need to avoid doing stupid things in this life, and then... patiently wait."

This statement points out the key to compound interest: avoiding major mistakes + long-term persistence is more important than pursuing short-term profits.

If you're willing, I can help you create a compound interest calculator; by inputting the principal, annual return, and time, you can visually see the asset growth curve. Want to give it a try?