What is something that you did with the money that best improved your life?

I understood two very important things about money.

1. Compounding

2. Risk Reward

Power of Compounding: If I have 10 lakh in trading capital. I manage to make 6% return per month i.e. ₹60,000/- from it. My expenses are 3% i.e. ₹30,000/- and rest of the 3% I compound, then in 5 years, my trading capital will be ₹81 Lakh. I have not considered that at one point my expenses will stagnate. But here I am still assuming that I will spend 50% of what I will earn. Do not believe me, take a look at excel:

You think it is too theoretical to be implemented on. See the link here where I am doing it every month slowly and steadily.

Source: Options Trading | PMS Slowly and Steadily moving in the direction.

Understanding Risk-Reward: I have money which acts as my soldiers. Every day I send them out to bring prisoners. More money. If I am sending 1 soldier out, I expect it to bring 2 back with it. If I am sending 1 soldier 10 times, I expect it to come back winning at least 8 times. This is risk-reward.

Understand it the simple way. I provide professional training in Options Trading. Once I opted in for Twitter Ads and it cost me ₹7000/- for a reach of 30k people. I immediately took it. Even if 1 of the 30k people opted-in for my training, my cost would have been recovered. A risk worth taking.

If we understand these two aspects of our money life, our attitude towards money will change 180 degrees. At least mine did.