Today we are talking about knowledge compounding; not compounding interest or money, but compounding knowledge.
For a definition, Compounding is the process whereby a base amount is increased by a certain percentage, usually an interest rate, in a certain period of time.
Then for each successive period of time, the percentage increase is applied not just to the base amount, but also to all of the prior increases to the base amount.
So, the increases are not just added, they are also multiplied.
It works for interest compounding with money, and it also works with knowledge.
Small, incremental increases in your knowledge of Real Estate Investing can result in incredible increases in your total knowledge over time.
I have numbers to prove it, and I think you’ll find that these numbers are amazing, so let’s get started.
Here’s the concept we are working with.
If you increase your knowledge of Real Estate Investing by just 5% per month, at the end of 3 years, you will know almost 6 times as much. That’s 600%.
At the end of 4 years, that changes from 6 times as much to over 10 times what you know right now. 1,000% in 4 years.
And at the end of 5 years, it would be almost 19 times as much.
This is an awesome concept, and might be a little overwhelming.
But you can look at the numbers on a Chart, and track it year by year, and see how it grows exponentially.
5-YEAR (60 MONTH) COMPOUNDING AT 5% PER MONTH
- 1 1.05
- 2 1.1025
- 3 1.1572
- 4 1.2155
- 5 1.2762
- 6 1.34
- 7 1.4071
- 8 1.4774
- 9 1.5513
- 10 1.6288
- 11 1.7103
- 12 1.7958
- 13 1.8856
- 14 1.9799
- 15 2.0789
- 16 2.1828
- 17 2.2920
- 18 2.4066
- 19 2.5269
- 20 2.6532
- 21 2.7859
- 22 2.9252
- 23 3.0715
- 24 3.2250
- 25 3.3863
- 26 3.5556
- 27 3.7334
- 28 3.9201
- 29 4.1161
- 30 4.3219
- 31 4.5380
- 32 4.7649
- 33 5.0031
- 34 5.2533
- 35 5.6160
- 36 5.7918
- 37 6.0814
- 38 6,3854
- 39 6.7047
- 40 7.0399
- 41 7.3919
- 42 7.7615
- 43 8.1496
- 44 8.5371
- 45 8.9849
- 46 9.4342
- 47 9.9059
- 48 10.4012
- 49 10.9213
- 50 11.4673
- 51 12.0407
- 52 12.6427
- 53 13.2749
- 54 13.9386
- 55 14.6355
- 56 15,3673
- 57 16.1357
- 58 16.9425
- 59 17.7896
- 60 18.6791
KNOWLEDGE COMPOUNDING FOR YOU
And if you are someone who is just starting out, it should be very easy to increase your knowledge of Real Estate Investing by 5% per month.
You could do that if you read just one Chapter of my book “50 Real Estate Investing Calculations.” That one Chapter will be about 5 pages, and will take you about 10 minutes to read and understand.
And that book has 50 Chapters.
And if you are further along in your career, you can go to my other book “10 Other Real Estate Investments You Could Do” and read the Chapter on Storage Units, or Raw Land, or Billboards.
I guarantee that this is knowledge that you don’t already have.
And even if you are near the top of your game, this will still work for you.
Read the Chapters on Charging Orders or LLC Operating Agreements in my book “Your Best Business Entity For Real Estate Investing.”
It is written in Plain English and explains legal concepts clearly.
And I’m not just promoting my books here. I use them as examples because I know what I can promise you about them.
And all of the “Dummies” books are good.
There is plenty of good content out there for your experiment in knowledge compounding.
Just stay away from the hustlers telling you that you can make a million dollars in apartment buildings with no money and no experience. Although they do make sure that you have no money by charging you $25,000 for the course sold at their “free” Seminar. By the way, I’ve seen the course, and the big secret that they reveal for how to make a million dollars with no money and no experience is that you simply lie, and use fake references and fake documents, taking advantage of other people. Really.
But, back to your plan.
Three years of your life are going to pass, and there’s nothing you can do about it.
The question is at the end of those three years, will you know six times as much about Real Estate Investing as you know now, or will you know about the same amount.
It’s up to you.
You definitely can learn 5% more each month. And that’s what knowledge compounding is all about.
But you need to plan it, and then do it.
I cover this same concept in more than one of my books, but the one with the most detailed information is “Do This, Not That!” and you can find it here on this website. Use the 3D Flip Reader to look at the Contents and read the first few chapters.
The paperback is available on my Amazon Author Page, along with my other books.
And I have related Articles about tax matters from other perspectives on my LinkedIn Page.
I am also active on Quora.com where I have answered over 300 questions, and they have almost 3 Million views.
If you happen to be doing, or if you are considering doing, a Section 1031 Like Kind Exchange, then you will really appreciate the value of what we are talking about, and I have a lot of material for you to consider on my S1031 Exchange website.
You should always check out the credentials of anyone, like myself, who you are relying on for accurate information by looking closely at their Biography. Here’s mine.
If you are interested in exploring my Catalog of Real Estate Investing books, but don’t know where to start, I suggest these three.
DISCLAIMER: I am an Attorney licensed to practice in Texas, North Carolina, Virginia, and the District of Columbia. But I am not your Attorney. I would be honored if I were, but I am not. Reading this Blog does not created an attorney-client relationship between us. Internet content should not be used as a substitute for the advice of a competent Attorney admitted or authorized to practice law in your state or jurisdiction.