The secret of exponential growth on the road to financial freedom

The basic goal of anyone starting to invest or trade is to grow their balance and become rich or wealthy, achieving financial freedom to live the life they want. Many people try to reach this goal as quickly as possible through shortcuts. In today's article, I will discuss the problems that this situation can cause and why growing over time is better, the power of exponential growth, and the opportunities it can bring to you.

First of all, I have repeatedly emphasized that one of the things that every newcomer to investing or trading should do is not only to work with graphics, but also to develop financial literacy, I will make a reminder by saying it again (. One of the basic propositions that everyone striving to improve financial literacy encounters is the concept of exponential growth of the balance. I met the concept of exponential growth with Efloud's article titled 'From $1,000 to $1,000,000' and I can say that it is a system that changed all my investment mentality. When I started trading in the financial markets, I realized that spot purchases also have a great potential when spread over time and supported by the right moves, while I used to think that money would be constantly earned by trading and opening futures contracts. This awareness comes from investors and writers such as Efloud, Robert Kiyosaki, Peter Lynch, Morgan Housel, Alfred Mill, Charlie Munger, Warren Buffett, Mark Douglas. I can say that if you read the books of these individuals, your investor profile will change.

What is exponential growth?

Returning to the main topic of our article, exponential growth means that your balance will continuously increase at a certain rate over time. Let's proceed with the frequently given example of $1,000. Let's assume you have $1,000 and achieve a 100% gain every year. In this case, your account will grow by 2x each year. Your investment journey, which started with $1,000, will be completed with $2,000 at the end of the first year. So, we can say that your new starting balance for the next year is $2,000. In a scenario where you achieve a 100% gain every year, at the end of the second year, it will be $4,000, at the end of the third year, it will be $8,000, at the end of the fourth year, it will be $16,000, at the end of the fifth year, it will be $32,000, at the end of the sixth year, it will be $64,000, at the end of the seventh year, it will be $128,000, at the end of the eighth year, it will be $256,000, at the end of the ninth year, it will be $512,000, and at the end of the tenth year, it will be $1,024,000. So, is this really possible? Neither I nor you can know whether you can double your account every year. In my opinion, with effort, hard work, and dedication, anything is possible in human life, but what I want to emphasize is not reaching $1 million in 10 years, but expanding your vision in a broader and different perspective.

Intelligent investors who can predict the compound return of time

The first condition to achieve financial freedom is to start investing, and the sooner you do it, the more likely you are to grow exponentially as you can see above. Perhaps in the first year, by preferring very safe investment instruments, you will show a small growth, but each year, even with the same rate of profit, you will be able to reach tremendous balances. At the same time, our basic recommendation in the scenario we set up was to grow your balance by 100% each year, but over time, you will become more experienced, improve your financial literacy, and increase your profit rate. While you may end your first year with a profit of 20%, 30%, or 50%, after a while, your profit rates will reach 100%, or even more. The way to achieve this is to develop yourself as a real investor in terms of financial literacy and take action. It is not very likely that you will realize this scenario by just waiting without doing anything based on what you hear from others, your friends, or influencers. Even if you do, it is not possible to sustain it in the long term because many experiences you will gain in 10 years will actually shape your investor profile and enable you to take more conscious steps in financial terms. On the other hand, when you act on someone else's word, you may even waste your $1,000,000 in a single day. You can find many stories about people losing all their money on social media. A smart investor is someone who can think long term, predict the compound return of time, and gradually grow both their balance and themselves exponentially.

As I mentioned at the beginning of the text, many people aim to reach large amounts of money quickly through shortcuts. Like many others, I also want to achieve financial freedom and strive for it. However, we need to understand that it is not as easy as it seems, that we need to endure hardships in order to enjoy the benefits, and that gradual growth is more appropriate. I met someone at an event of an exchange recently, and they said they have been particularly investing in the crypto field since 2017. They mentioned that they have grown their portfolio by about 50x overall. They said that generally, no one really made money in the first bull run, but if you don't lose faith until the next bull run and prepare well, you can achieve a good profit.

How correct is it to turn your back on the market?

This introduction actually led to a refreshment of my belief and my desire to write this article. Many people have suffered a lot of damage in recent days, even those who bought a long time ago have incurred costs. Many people are questioning when the bull will come, but in my opinion, we have been in the bull for a long time already if you look at the charts, there have been significant increases in many pairs since 2023. Don't get the message that I think the bull is over from what I said; in my opinion, there will still be further increases ) at least, I make my investment plans accordingly (. However, if you really want to be wealthy, you should not only make your plans for this period. You should believe in the exponential growth of both time and balance. Although the gain in the example I gave is a tremendous ratio, it actually occurred over an eight-year period. Therefore, the investments you make in yourself financially can make you very rich by allowing you to see opportunities and grow gradually. If the person I met had done nothing, gave up on the markets, or acted on what they heard from here and there, could they have achieved such a high growth?

As an individual, I often tell my friends that this time I have learned a lot and taken many notes, saying that these are preparations for the next cycle. If you study financial markets, you can see many cycles like the interest-inflation cycle, and cycles that occur every x years in the cryptocurrency markets. By examining the market you invest in and noticing such cyclicities, and becoming a real investor actively following the markets, you can start with a small balance and gradually grow your portfolio. I am currently 26 years old, and in 10 years from now, instead of complaining about the same conditions, I am striving to develop myself and achieve my goals by doing what I believe in. The best advice I can give you is to similarly develop yourself and believe in the power of time. Gradually growing and believing in the process will lead you to succeed, rather than getting rich quickly and easily.

This article does not contain investment advice or recommendation. Every investment and trading move involves risk and readers should conduct their own research when making a decision.