Recycle your profits if you want to be a millionaire

The quickest way to compound your growth is to reinvest you’re profits this can be anything from dividend payments to business profits.People often overlook how much this can impact your wealth of course if you rely on these sources as a full time income you can’t do this but if they are one of many sources I believe you should reinvest 100% of what you make.

Ways to reinvest

Stocks- a simple reinvestment plan might include spending your dividend payments on certain companies lets say you just received a £100 dividend payment this could either all be put into one stock or invested across multiple this is very circumstantial or if you want a hands of approach accumulation funds are common where dividend are automatically reinvested.

Real estate- two common ways to do so would be:

save it towards the next down payment on your next property

use money let over to pay down the mortgage on your properties

again with this its circumstantial I personally would reinvest it towards the next down payment however if I was older or more risk averse I would 100% pay down the mortgage to stabilise the portfolio.

Business- there’s are hundreds or even thousand of possibilities on what you could do here you could invest in marketing, anew product/service or even branching out into something new the possibilities are endless and dependent on what stage you’re business is at.

Why reinvesting is so important

reinvesting is important because it means you can take advantage of the snowball effect essentially what this means is your original capital gains interest this interest will eventually also gain interest and so on this is why you get exponential growth when you continually reinvest your profits, this is why it is so important you should let your money do the hard work for you, this effect will take a long time to make a big difference but its certainly something you will notice as your portfolios grow.