Do you want SEK 20,000 today Or do you want SEK 1.3 million in 30 years? You decide You may be dreaming of making a lot of money And the truth is that most of them want to get rich today But if you knock it out, if you look in the long run and how the other millionaires and billionaires how the very richest in the world have become rich So it is with the help of the compound interest Everyone wants a quick fix You want abs now But you do not want to go to the gym You want to buy a car today but you have no money Do you have patience Then you will get rich Believe me After this video you will have The formula To how to do We will go through three points And then you will understand what the interest rate on interest rate effect is And how to apply it On your investments so you can easily start investing And in the long run build a large fortune So we start with point No. 1 And that is perhaps the most boring point But what is interest on interest And simply put, it's about you Invest your money And after a year So they increase Let me take an example, let's say I have SEK 100, your SEK 100 will receive 10% interest Return every year After one year, your SEK 100 has become worth SEK 110 After a year This is how you got an interest on your money and it is now that this interest-on-interest effect strikes Year 2 When you have already received Interest on your already interest-bearing money then Earlier then Then you will receive interest on your already interest-bearing money Year 2 Yes, then you get ten percent On your SEK 110 As they are now worth And when you pull it out in the long run it's then You can see the great effects of the interest-on-interest effect Overtime So these will increase in value because you always get interest on your already interest-bearing money It is an interest-on-interest effect very briefly explained And now you come surely ask "But how do I get interest, where do I get interest from" And it can be a savings account, it can be funds it can be shares, Cryptocurrencies it can be anything for investments that you get a return on. The most common and what I usually talk about investing in stocks on shares This is how you get a profit sharing from these companies that you have invested in And if you do not know what a stock is, check out my video about stocks for beginners But with stocks Yes, then you get a dividend from the company's profit Which allows you to reinvest the money And normally you might get two to four percent In different shares Which gives out this kind of profit sharing And that is exactly what is magical in the long run When you reinvest this dividend year after year That's when you can see really cool effects With how your money grows I want to take the example Castellum a real estate company Those who bought shares For SEK 100,000 in Castellum in 1997 and has retained them Today has shares for a value of SEK 4 million Those shares currently yield Dividend At approximately SEK 110,000 per year That is more than the original investment amount How sick! So more than what they invested Get them back every year In dividend Crazy! The key to why the interest rate effect is so crazy It's because you use the time The longer you invest The greater this interest rate on the interest rate effect Therefore, it is extremely important that you who are young That you invest As early as possible The greater the interest rate on the interest rate effect. This is what gives some an edge over others For example, many parents invest their money in their children before they are even born Which means that this interest-on-interest effect can only work for the money, just over time How should you think when investing your money if you want to get an interest rate effect? Yes, I'm thinking like this Money I do not need Money that I pile up, I invest it! I have no direct plan with them. But I just want to invest them and let the money work for me. And so you should think. You do not have to worry about saving a latte a month or whatever Live your life, enjoy! But money that you get over that you can afford to invest does it! And let this money be invested over a longer period of time. The longer you invest The greater this interest rate on the interest rate effect And that's what I want you to understand This is how it looks If you, for example Deposits SEK 20,000 that you invest After one year, they have increased by 15% to SEK 23,000 Year 2 Yes, then they have increased to SEK 26,450 Now keep an eye on this green bar here So that's how much It increases For each year After 3 years DKK 30,000 After 4 years DKK 34,000 5 years Six years 7 years Look at the green how much bigger it will be than the blue bar And this then proves how much your money increases over time And now we max out on this really properly So that you can see what a difference it makes After 30 years so have your 20,000 become worthwhile 1.3 million And this is an example of what the interest-on-interest effect can do to your invested money if you just have patience And let them work year after year Einstein called this the eighth wonder of the world And there's something in that This when you pull it out in the long run That's when they get these magical effects So it So-called interest-on-interest effect "snowball effect" This is what allows you to get filthy rich In a really long time And what the interest-on-interest effect is really about It is that you have to be patient Just like you do not get stomach cramps After a gym workout And you will not get rich of scratching a bouncy castle, if you do not have a damn lucky It's simply about investing your money And then you have to be patient You should let the money grow over time Year after year, they grow and grow And the longer you wait, the longer The bigger the snowball and the more money you make. This is not revolutionary You will not get rich today And that's not the point either The very purpose of telling this is just to be long-term when investing in stocks It is in the long run that you make the big money Now these people are talking about the fact that a friend or uncle or something else has become a millionaire In one day through stocks That may be true, but there is a very low chance that you will succeed as well. That's why I want to Clarify over how important it is to you Is long-term and that you have a long time horizon when you invest in shares It's incredibly important Have patience Because that's when you make the big bucks If you do not already know what stocks are or how they work If you have not already opened A share account, I think that you should do it And in my video shares for beginners, I go through how easy it is to actually buy shares And how it works and how you make money on them I think you should watch that video And if you already have a stock account and know how it works, I think you should check out my second video about beginner mistakes as different beginners do when buying stocks Thank you so much for watching this video and if you like it, feel free to press thumbs up Have a good time See you next time Hello