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What’s the key to success in investing?

If you talked to the so-called gurus of Wall Street, you’d likely get a bunch of confusing answers based on conflicting economic theories, cultural trends, speculative ventures, overseas markets, and countless other factors that supposedly play a role in how the market performs.

I have a simple answer to the question. And it might surprise you.

The key to investing isn’t something Wall Street can offer. It’s something only you can provide.

Patience. Old-fashioned patience.

Compound Interest Meets Bamboo Trees

I’ve often spoken about the power of compound interest in planning for retirement. Let’s say you invest $1,000 and it earned 10% a year. After one year, you’d have $1,100—the original money plus $100 that interest earned. The second year, you’d have slightly more—$1,210—because you’re earning interest on top of interest. The investment compounds, or builds up, over time. Now $1,210 doesn’t seem like a big deal at first, but it becomes a big deal later.

You see, compound interest will help you reach your retirement dream, but it won’t happen overnight. It won’t even happen in a year. Or five. It’s kind of like how bamboo trees grow.

Let’s say you decide to plant a bamboo tree (actually, it’s considered a grass) in your backyard. You get the seedlings and the right soil. You do all the necessary planting and watering and nurturing as instructed. Then you wait. And wait. And then you wait even more. Six months pass and no change. After a year, you still don’t see a single change. You’ve put in all this work, but you don’t see any evidence that your hard work is paying off. It looks like nothing is happening.

Then, five years later, you notice that a bamboo shoot has popped out of the ground. The next day, another appears. Then another. And once they break ground, they grow exponentially. Some species of bamboo can grow 35 inches per day! What once seemed lifeless now shows unbelievable growth.

That’s what happens with compound interest. It works behind the scenes, unnoticed, for years before you can see significant growth. But then out of nowhere, you’ll see crazy growth—if you’re patient with your investments.

How to Get Huge Growth on Investments

Let’s say you received a $50,000 inheritance in your mid-20s. Lots of people that age would blow that money on a new car, nice furniture, a new wardrobe, and a bunch of other stuff. But not you—you invested it and got 8% interest. After a year, you’d have $54,000 without doing anything! In 10 years? You’d have more than $100,000. In 30 years, you’d have over half a million dollars. And if you left that money alone for 40 years, you’d have over $1 million. And you didn’t do a single thing. It’s what you didn’t do that matters. You didn’t lose your patience.

The Power of Patience

We live in an instant culture. We want it, we get it. Immediately. From downloading music to pain relief, we are used to getting what we want now. Americans are impatient people. Just wait in line at a theme park and you’ll see this demonstrated! The problem is that being impatient will derail your retirement dream.

To combat impatience, stay focused. Keep that retirement number in front of you—that amount of money you need to enjoy the retirement you’re dreaming about. Don’t let anything distract you, whether it’s a blog post or a friend with an amazing “investment opportunity.” And don’t get spooked by the market’s ups and downs. That’s normal. In time, it will recover.

Remember, haste makes mistakes—especially when it comes to investing. Don’t let impatience rob you of your retirement dreams.


  • Irvin Bellamy

    Great Read. Very good fundamental discussion. I get the sense you were raised with a football in one hand and your hp12c in the other.

    It’s amazing how your voice touches everyone and motivates, inspires, and encourages people to take effective actions towards their financial goals.

    I myself also played football in two national championship games for Penn State in 1986 and 1987 taking the championship once in 1987.

    I also worked for Sallie Mae under Albert Lord after graduate school in capital markets.

    Never heard of Dave Ramsey back then but I basically handed my $34k salary back to Sallie Mae until I paid off my $40k or so in student loans I lived on while attending undergrad and grad school at Penn State.

    I then went in to work for the Federal Reserve Bank of NY on the Market Risk Examination Team.

    Two African Americans with similar life experiences and I’m so excited to see your success in helping people retire with dignity.

    In fact, when I first graduated I started doing spreadsheets for all my family and friends calling it the “Bellamy Miser Plan”. It was my simplified approach to budgeting, investing, and achieving a million bucks in 20 years.

    I read the first two chapters in a couple minutes for free and I look forward to ordering your book when I return to the USA in July.

    Continued success!

  • Sandee

    The challenge is two fold: 1)As an older investor, I do not have the 20, 30 40 years to wait. I need to have an investment that makes good returns in a shorter period of time, yet does not put the whole nest egg at risk…..and 2) I have followed the advice of DR and chosen the 4 types of investments he recommends….but I have NEVER experienced an annual 10% return. More like 4%. It may be HIGH one month…and then lose the next or next to nothing. So both those issue compound together to make the patience advice hard to make sense.

    • Charlie

      I am in the same boat as you being ‘older’ (66). I haven’t invested yet being, just now, at the tail end of the FPU course. I am comfortably out of debt, thankfully, and the mortgage is paid, yeah!
      I am glad you posted because according to Dave’s teachings I am not to invest in anything that I don’t understand – which is everything about investing – other than if I buy a chainsaw and cut down a tree for a customer I can make a profit. That’s if I want to be a tree remover.
      I have had hinky feelings about the 10% and 12% and, at times, 18% returns mentioned in some of the FPU lessons. Dave said in one of his videos that the market has performed that way ‘on average’ since its ‘inception (early 1900s I think)’ but is that what it’s doing now and, like you, do I have the patience, let alone the time, to watch it perform that way in its time.
      Your 4% reality seems to make sense but is that after the mutual fund commissions have been paid and is inflation (say-4%) taken into account? If not, in the end, did you make anything at all, or did you lose?