Why 30% Returns Change Everything

[0:00]30% is the threshold where compounding starts working for you. At 10%, which is the stock market average, you need seven years to double. At 30%, you double in under three years. The real magic is that you're not just growing revenue, you're reinvesting cash flows at that same 30% rate. A business throwing off $200,000 that you can plow back in at 30% is worth infinitely more than one where you have to pull the cash out and hunt for new investments. When evaluating any business, ask, can I reinvest the profits at a high rate or does the cash just sit there? Look for big markets with room to grow. Avoid businesses that are already maxed out in their niche, even if current returns look good.