Here’s Proof That Time is Your Greatest Ally in Investing

Posted by Fitz Villafuerte under Investing on May 12, 2014

A lot of people become impatient when it comes to investing. I can’t blame them because we’re getting used to having things quick.

Hungry? Go to a fastfood or just prepare some instant noodles. Need to talk to a friend? He’s always just a text or call away.

Sending a document? You can scan and email it within minutes. Doing research? Open your browser and Google what you need.

So it’s no surprise that when it comes to making money, we expect to see instant profits. But that’s not how it works, particularly when it comes to investing.

Here’s an illustration that shows you why you need to be patient in growing your wealth.


Let’s say that you put P100,000 in an investment that grows at around 18% per annum. Do you know how long it will take for your money to double or become P200,000? The answer is around 4 years.


Most people will say that’s a pretty long wait, especially entrepreneurs. If you’re good in business, I’m sure you can easily double P100,000 in less than 4 years.

But how long will it take the same investment to make another P100,000?


Yes, you would only have to wait around 2.5 years. Now that’s still a bit long, but I know you’re already getting my point.

How about the next P100,000? How soon can your investment make that amount?


The next P100,000 will only take around 2 years to make.


Wait a little over a year more, and you’ll have another P100,000.


Because of the power of compounding, the next P100,000 will always come much faster.

In fact, that P500,000 you already have will become P600,000 in a little less than a year.


What does it all mean?

Investing is a marathon – it is a patience game.

The benefits are not instant, but comes much later, and only if you let the power of compounding work its magic.

So invest now, and let your money grow.

Remember that when it comes to investing – time is your greatest ally.

I know you’re wondering, what investment can give 18% per annum growth? The stock market and equity funds are your best candidates for this kind of growth.

As a concrete example, I bought Jollibee (JFC) stocks at P34 per share back in 2008. Now, it’s being traded at around P170 per share.

It took almost 10 years for our investment to grow from P100,000 to P500,000 in our illustration above.

If that P100,000 was invested in JFC stocks, it would have become P500,000 in just 6 years – imagine that!

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9 Responses to “Here’s Proof That Time is Your Greatest Ally in Investing”

  1. Raymond says:

    Thanks for sharing this. The power of compounding is what I really think making great investors rich. God bless!

  2. rors says:

    True. I started buying JFC stocks at 76/share. That’s why also you should only invest your spare money, one that you are okay not to touch for long term.

  3. Alvine says:

    I also bought JFC this month hoping to grow it by next 5-6 years.

  4. alma apon kawagay says:

    Im waiting for my approval application to join investing in stock market.Thanks to this blog I’m inspired. God bless Sir Fitz

  5. Angel says:

    Hi Fitz! Compound interest is not applicable to UITF or Mutual funds right? so your money invested will not grow as fast as what you’ve illustrated. My question is can i do something about it? I’m planning to invest in ALFM Growth Fund or any BPI UITF Equity and do cost averaging, I thought before that compound interest works in mutual funds or UITFs like these but later on after analyzing how mutual fund works, I realize that there is no compound interest at all.

    Thank you and I hope you can enlighten me!

  6. Fitz says:

    Hi Angel, yes compound interest is not applicable in pooled funds.

    But money invested in them can grow as fast as I’ve illustrated because they’re actively managed and the earnings are typically reinvested back which results to an internal compounding of returns.

    If you plot the growth of share or unit prices of top pooled funds over several years, you’ll see that a smoothed line will closely resemble the illustrations above.

  7. CJ says:

    JFC is down at 199 now. Will it still continue to go down? Or should I just invest my 100k by Monday?

  8. iameriberta says:

    Im am confused… compound interest is not qpplicable in pooled funds .?? i.e. mf and uitf?

  9. iameriberta says:

    My understanding was, cokpound interest works both in mf and stocks…thnks.

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