Compounding vs. Speculation Rates of Return

compound vs speculation

A major insurance company conducted a survey interviewing 439 people, ages 44 to 75. The survey gave them a choice between two products. The first product had an 8% rate of return, but had the possibility of losing value and being vulnerable to market downturns. The second product was a 4% rate of return, but was guaranteed not to lose value. 76% of the respondents said they preferred the guarantee over the possibility of losing money.

There is more to be gained by avoiding losses than picking apparent winners! Our role with the Circle of Wealth® system is to help our clients avoid, minimize, or eliminate wealth transfers. The keys to growth of money are uninterrupted compounding and consistency. It is difficult to maintain consistent returns when there are fluctuations with market interest rates.

How to Illustrate Compound vs. Speculation Rates of Return

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