 Good day, fellow investors! I thought to make the last episode for 2018 about something that should be the most important message when it comes to stock market investing in 2019 and beyond. That is the power of compounding. Einstein said compound interest is the eighth wonder of the world. He who understands it earns it, he who doesn't pays it. Buffett clearly explains what his investing focus is in this excerpt from his last letter to shareholders. I quote, for the last 53 years the company has built value by reinvesting its earnings and letting compound interest work its magic. So what it is so important about compounding interest? Let me show you another example going back to Benjamin Franklin who was such a visionary that he understood the power of compounding back in 1790. So the real story goes something like this. Franklin decided to leave a deposit of 1,000 pounds back then about 4,400 dollars, one to his native hometown of Boston and then another 1,000 pounds to his adopted hometown of Philadelphia. On the condition that they keep those funds invested for the next 100 and then 200 years. So Franklin said that the funds should be used to make loans at 5% interest to young craftsmen under the age of 25 to help them set up their businesses. The loans were to be given only to those craftsmen who were married, had completed their apprenticeships and could obtain two co-signers to vouch for them. After 100 years each city was to take about 75% of the fund to use for public works like bridges or whatever. They were to then continue loaning the money for another 100 years. At the end of those 100 years each city would get about 25% of the money and their respective states would get the rest. Head Boston and Philadelphia followed through with Franklin swishes successfully. They would have each had nearly 20 million in their funds at the end of 200 years. Of course its politics, its states, its cities, its governments, they didn't follow through but still they managed to have about 5 million with Boston after 200 years and Philadelphia had just about 2 million. But still they started with just 4,000 and ended up with 5 and 2 million after 200 years. That is because they invested in different things, insurance, things like that that didn't work out as planned, plus they could take out parts of the money after a certain amount of time. Nevertheless, turning 9100 dollars with what they started to 7 million is something important and that's the power of compounding because Franklin said that they cannot invest the money for the first 100 years. And this shows the power of compounding. 1,000 dollars at 8% compounded annually after 10 years its already more than double 2,100 after 20 years, 4,000 after 30 years 1,000 dollars is already 10,000 which means that's 10 times your initial investment. After 50 years we are 46 times, 60 years 100 times and then the power of compounding really kicks in and then after 100 years you are 2 million something. Now you'll say Sven, okay, but how does this work for me? After 60, 70, 80 years I'll probably be dead. So who cares about compounding? Well, this is the problem with compounding. It is that it doesn't give instant gratification. You might see a dividend of 5 bucks as nothing. However, even something small grows and compounds over time. Look at this 30 year. The 1,000 goes to 10,000 over 30 years. So if you invest 100,000 today and you want to retire in 30 years you can count on a million with just 8% annually and this little bit of patience if the markets do well if your investments do well that can go even faster. But the key is to focus, okay, 8%, 10 times my money in 30 years that's amazing. This is how compounding actually works. You can check the CAN Academy, just write how compounding interest works, CAN Academy, video on YouTube, excellent video that explains it in detail, but just let me show you here. If the initial investment is 10,000, in this case 10% compounded monthly, then after one year already the interest is 1047 dollars. After year two the interest isn't 1047 times two. It is even a little bit more because the initial interest gained in the first year starts to compound more and more interest. So as the years compound by you get more and more money. Check the video of the CAN Academy. However, when it comes to investing the first, I just went to Bloomberg for the stock market. The first news I got today was this, US stocks futures really after Trump and Xi big progress phone call. This is not important for investing. The important thing is by how much you can compound interest invested in businesses. And that's my message for 2019 and whenever, wherever, when it comes to investing, compound the interest. Let the businesses you own compound the interest, grow dividends, earnings, etc. And then you will do good. Now it might be good. Trump's really okay. Two months ago it was bad. Two months from now it will be again bad, etc., etc. Don't listen to this noise, short-term stories. Try to set yourself up so that compound investments lead your portfolio. Just an example. This should be in the news and this should be compounded in the news all the time. But this should be boring. And that's why it's not in the news. Really, Trump, Xi, that's a big news and people will read it thinking that it matters to their investment life portfolio, whatever. This is what matters. Walmart has increased its annual cash dividend every year since first declaring a 5 cent per share annual dividend in March 1974. For additional historic dividend information, please see their annual reports. But look at how the dividend just went up, up, up, up and up. You find such investments, one Walmart that fits your portfolio well and you'll let it grow for 20-30 years and you'll do amazingly well, no matter what happens with China, with the US, etc. Try to focus on compounding and everything will be easy with your investments. Thank you for listening. If you like this mindset, please consider subscribing as we talk about stocks, investment strategy, investment education and long-term investment mindset. As this is the last day of 2018, if you're listening, still in 2018 or in the beginning of 2019, I wish you a great, great compounding interest 2019.