Just before tackling the subject of compound interest, I have to tell you about an old billionaire whose name you have surely already come across somewhere: Warren Buffet.

Let’s be honest: I don’t have much in common with Warren Buffet.

He is neither a “role model” for me, nor an example of an entrepreneur who truly inspires me.

  • He is the very incarnation of a very traditional American entrepreneurship in which I do not identify at all: that of big corporations, industries and mass consumption  (for example, he actively invests in companies like Coca-Cola, Heinz or American Express) .
  • He is a model representative of Wall Street financiers: Warren Buffet is 91 years old today, and he has been buying and selling stocks since he was… 11 years old!
  • And he is the image of the American dream as we have always been told in the media: he has been in the TOP 10 richest men in the world for years, without ever having inherited a fortune. family.

Yet, this same Warren Buffet gave me a lesson in personal finance a few years ago.  A lesson that I wish I had received much earlier in my life as an entrepreneur , and that I would like to share with you.

Because this old billionaire is not nicknamed “the wise man” or “the Oracle of Omaha” for nothing!

(Omaha is the small town in Nebraska where Warren Buffet was born, and still lives!)

He is the man who turned a few thousand hard-earned dollars selling newspapers and Coca-Colas… into several billion dollars (!), all in 80 years of savvy investing.

He is also the man who transformed a failing textile company (the famous Berkshire Hathaway factory) into an investment company that is now worth more than 440 billion dollars (!!).

And he generally explains these exploits by three factors.

Three factors among which is the lesson I take from Warren Buffet , which he sums up in this sentence:

“Three things: Living in America for the great opportunities, having good genes so I lived a long time, and compound interest. »

For the first factor,  “Living in America for the best opportunities” , it fails. I love New York very much, and I go there regularly. But I have no desire to leave France to settle there.

The second factor,  “Having good genes to live a long life” , is also a failure. Not because my genetic makeup is problematic, but because it is simply out of control.

We are left with the third factor:  “compound interest” .

Compound interest is both a factor accessible to everyone (without exception), and over which we have complete control. And above all, it’s a lesson that I won’t soon forget.

Because the principle of compound interest is so powerful, it made me realize one of my biggest mistakes as an entrepreneur .


Compound interest is what Einstein soberly called “the 8th wonder of the world”.

This is a fairly complex phenomenon at first glance. But in reality, it can be summed up very easily with this diagram:

Compound interest scheme

Do you see the blue curve?

It represents “simple” interest: for example, let’s say that you invest €1,000 in a Livret A, and that this Livret A earns you… let’s say 10% per year (which is quite improbable, I grant you).

Well, the principle of simple interest allows you to obtain (in theory) €100 per year, which corresponds to the 10% interest on your initial investment.

Except that in reality,  it doesn’t happen exactly like that .

The reality is the red curve.

Because the 10% interest that you earn on your super livret A is calculated on the amount available on this account. And at the end of the first year, you no longer have €1,000, but €1,100!

Consequence: your 10% interest no longer brings you €100, but €110 the second year.

This is the magic of compound interest .

And it’s this magic that makes compound interest so important to understand, whether you’re an entrepreneur or not.

Because each year, the interest generated is added to your investment, to generate new interest. In other words,  your money makes money, all by itself .

And that means several things to you:

  1. You don’t need to invest a lot of money to gradually build up your savings.
  2. These savings will grow exponentially over the years, without you having to do anything.

Because if we take the example of your testosterone booklet A, and you decide to add €1,000 each year to it, the effects of compound interest are already being felt considerably.

Example google sheet compound interest

After 10 years, instead of having “simply” put aside €10,000,  you will have saved €17,531 .

After 20 years,  you will have just over €63,000 at your disposal , instead of the €20,000 you initially invested.

And after 40 years,  your €40,000 will have transformed into €486,851 .

Just that.

Example google sheet transformation interests compounds

But what you should especially remember here is that compound interest gives you an incredible opportunity:  to regain your financial freedom in a few years .

They give you the opportunity to build up a holiday budget, a reserve in case of a hard time (what I affectionately call a “safety cushion”), or even a pension if you are self-employed!

All this, without having to worry about anything: you let your money make money, and you concentrate on your business.

(It’s a bit of a caricature, but that’s the idea!)

The only condition to take full advantage of compound interest is to demonstrate:

  1. Essential, because you must save a small amount every month to fund your savings account (even €50 is enough, it’s the regularity that counts);
  2. And be patient, because the exponential effect of compound interest is visible over time (don’t expect to hit the jackpot in the first year!).

But I sincerely believe that the game is worth it.

Warren Buffet used compound interest to lay the foundation of his investment philosophy . He demonstrated rigor and patience for many years, and it worked out quite well for him.

He is a living example of what compound interest can produce after 80 years of work.

And I regret not having realized it sooner!


Between my 20th and 26th birthdays, I spent everything I earned every month.

At 20, it was perfectly normal: I gave dozens of hours of private lessons per week (I went up to 35 hours!),  but I still couldn’t cover all of my tuition fees. ‘student .

The problem is that it didn’t get better when I created LiveMentor.

I was struggling to find a viable business model for the company. I searched for it for years, and during that time I completely put my personal finances aside.

  • Most of the time I didn’t pay. The company simply wasn’t making enough turnover (so it was impossible for me to save anything).
  • Even when LiveMentor started to generate some income , my salary was very unpredictable. My priority was above all to preserve the company’s cash flow.
  • And when I finally managed to pay myself, I had to systematically reinvest this money in the business to guarantee its survival.

Like many entrepreneurs,  I had bet everything on my business .

I was 100% focused on its development, and I had no time for anything else. And then, I already had to manage LiveMentor’s finances, so I didn’t want to manage mine when I got home!

But all these years, I haven’t taken advantage of the power of compound interest for a second.

At 27, I hadn’t saved a penny.

I had no savings account , no investments, no safety net.

And it wasn’t until I turned 28 that something clicked. I did something that seemed extremely simple, but that I had never done before.

I set up an automatic transfer of €100.

At the start of each month, this automatic transfer took €100 from my current account to place it in a savings account (with rather high interest at the time).

So some of you might laugh when reading these lines:  “This Dana is very naive, this unfortunate automatic transfer must not have changed his life! “

Except that it really did change my life!

This “unfortunate automatic transfer” was even a revolution.

Because at age 18, almost a decade after earning my first salary tutoring,  I began to benefit from the exponential effects of compound interest .

And the years that followed this trigger were very structuring from a personal point of view:

  • Thanks to this automatic transfer and the interest it generated, I was able to gradually build up what I call a financial “safety cushion.”
  • This “safety cushion” allowed me to be much more confident about my finances: I was no longer afraid of the unexpected, and I knew that I could meet the needs of my business if necessary.
  • And I gradually increased the amount of this automatic transfer, to transform this “safety cushion” into a real long-term investment .

Despite everything, my feelings remain mixed.

I am very optimistic for the future,  because in a few years I managed to regain my financial freedom .

The health of my personal finances is no longer linked to the health of my business. And despite all the risks that being an entrepreneur entails, my personal savings should continue to grow thanks to compound interest.

Example Ending Balance 1

But I also have a lot of regrets.

I can’t help but think about all those wasted years (and all that wasted money) doing nothing about my personal finances.

Because if compound interest is exponential, that means your gains are exponential.  But so are your losses .


Yoann Lopez (the guest of our next webinar) sent me an Excel spreadsheet that allows you to automatically calculate compound interest.

It is very simple to use.

Simply enter 3 numbers into the tool:

  • The interest rate on your savings account;
  • The annual contribution (the amount you wish to save each year);
  • And the percentage increase in this contribution (if you want to gradually increase the amount you save each year).

The tool uses these 3 figures to calculate the amount you will be able to earn in the next 40 years, thanks to compound interest.

Example Ending Balance Google sheet

So I did a little experiment.

I calculated how much I lost between the ages of 20 and 28 , completely leaving aside my personal finances to focus on LiveMentor.

And the result is quite… scary.

Just think: if I had set up my automatic transfer 8 years ago, my savings account would show almost €29,000.

Without doing anything.

Obviously, this is an amount that I do not have today. And I can consider these €29,000 as definitively lost.

Because if money can be won and lost, time cannot be recovered.

And compound interest has only one variable:  time .

The earlier you start, the more time compound interest has to do its job. And just because I left my personal finances on the back burner for too long, I’ve deprived myself of $29,000 that I really needed.

For years,  I deprived myself of the financial freedom that every entrepreneur needs .

So I’d like to save you from wasting as much time (and money) as I did.

I would like this article to make you think about managing your personal finances , and the exponential effects that a simple automatic transfer of €100 every month can have.

And above all, I would like you to become aware of the power of compound interest, and that you no longer wait a second to take advantage of it!

So I offer you a game.

  1. I suggest you create a copy of this Google Sheet file , sent by Yoann Lopez .
  2. Simulate what you could have earned from compound interest if you had taken advantage of it earlier.
  3. But above all,  simulate what you could earn in the next 40 years , if you regain control of your personal finances today.

You can save it, and share it with your colleagues, your associates, your families, so that everyone can do their own simulation.

So of course, it’s a given that compound interest will never make you as rich as Warren Buffet .

But the objective is not there.

Remember, compound interest has the power to turn even the smallest amount of money you save into real savings. And in a few years,  it is those same savings that will give you back your financial freedom .

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