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COMPOUNDING, THE WIZARD OF WEALTH BUILDING

Adult; Business & Personal Finance; (Market)

This book is a treasure trove of mathematical secrets that will enlighten and enable the reader to create many times more wealth than what is possible with only conventional knowledge. It analyzes and exposes the huge impact that the compounding of yield, initial investment, tax, and duration of any investment will have on the growth and size of an investor’s wealth. It provides valuable and startling insights into the incredible heights an investor’s wealth can reach, climbing the yield-time curve of the investment. The information and insight from that analysis will enable the investor to choose the optimum mix of initial investment, yield, tax structure, and duration to maximize his wealth. The hidden power of differential yield rate is exposed. For example, a 1% marginal yield rate can have more dollar value than a 20% nominal yield rate. The mathematics of borrowing to invest is analyzed and discovered as the only airlift leading to ultra-wealth. Some foreign stock markets can become virtual gold mines for some nationals, especially if currency conversion is involved. For instance, Indians investing in USA. The book also shows how a sky-rocketing wealth-time curve can get flattened by the wrong tax structure and tax drag. Tax drag can drain 90% of the lifetime wealth of an investor with an income tax rate of only 20%. The reader will discover the uncomfortable truth that the wealth gap between rich and poor will always grow exponentially with GDP growth. This growth of the wealth gap is a natural mathematical phenomenon and not the result of a willful act by the rich or the government. Governments can only be blamed for not taking adequate corrective actions to counter a naturally occurring imbalance. The reader can also see how Corona has engulfed the world, emulating the same wealth-time curve that he aspires to use to multiply his wealth. It is also the same characteristics of wealth that cause tax evaders to lose more money than they save on taxes.
Reviews
Engineer and real estate investor Sebastian walks readers through the complexities of compounding, the exponential growth of money, and how to use the mathematical phenomena to generate wealth in this exhaustive financial guide. With simple language, relatable anecdotes, and an abundance of revealing charts to illustrate complex financial concepts, Sebastian thoroughly examines the fundamentals of compounding, while laying out for the average reader practical steps to making the compounding techniques of the wealthy work for everyone. He urges readers to plan for the long term—and to aim big.

This first volume in Sebastian’s Highway to Riches series begins with a list of specific concepts and strategies covered in the book (“How investing in some stock markets abroad can increase your net worth manyfold”), followed by a brief, inviting explanation of common financial terminology and Yieldometer, a software program developed by the author to calculate formulas discussed in his books. Sebastian goes on to demonstrate the fundamentals of compounding, exponential growth, and why percentages should never be trusted, all while using real-world and contemporary examples that touch on the global spread of Covid-19 and the progression of food decay to depict yield rates. The bulk of the guide provides detailed examples of how interest rates, time, net worth, and the global banking system can be manipulated to propel wealth-building, and Sebastian also takes time to demystify systemic issues in the economy, such as the hard math behind the ever-expanding wealth gap between rich and poor, offering six persuasive reasons that “wealth always flows from the bottom to the top.”

Sebastian’s advice is direct and straightforward. He states: “the secret to building huge wealth lies not in having an abundance of money to invest but in investing whatever amount you have for the highest possible yield rate and the longest possible time period.” Investors and readers interested in improving their financial position will appreciate Sebastian’s forward, unflinching analysis of compounding for wealth-building.

Takeaway: Novice and seasoned investors looking to capitalize their investments will find this in-depth guide eye-opening and inspiring.

Great for fans of: Ramit Sethi’s I Will Teach You to Be Rich, T. Harv Eker’s Secrets of the Millionaire Mind.

Production grades
Cover: B
Design and typography: B-
Illustrations: B
Editing: A
Marketing copy: B

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