In the first part of this article, we have said that success is not a result of sudden events or “accidents” but the accumulation of small and seemingly unimportant actions performed over a period of time. These small positive actions when applied to our financial situation can reap great benefits in the future as evidenced by the compounding effect.
However, compounding also has a dark side to it, which can result in great losses instead of great benefits if it is allowed to accumulate over time.