Editor’s note
- 4 Machines to grow your wealth, give them a try!
- Wealth from stocks
- Materials to grow your wealth
4 Machines to grow your wealth, give them a try!
Have you ever wondered why the richest people in the world, whether it is Jeff Bezos or the Hartono brothers in Indonesia, always seem to have one thing in common?
Their wealth comes from stocks. And that is no coincidence. There is a machine, a wealth system, behind it.
Just look, every time a list of the richest people in the world appears, their names are always linked to gigantic companies through stock ownership.
This is not just a physical investment. This is not just a one-off investment. This is the most fundamental machine for creating wealth.
So the question is: how does this machine work? There are essentially four key machines that turn stocks into an instrument for wealth growth.
Wealth from stocks
First, the stock machine. When you buy stocks, you are no longer gambling. You become a co-owner of a real company.
The meaning is very simple: if the company is profitable, as an owner, you also benefit from the profits. And this is where the magic begins.
As an owner, the success of the company is also your success. As the company grows, revenue rises, and profits increase explosively, the value of your shares automatically shoots up.
The second engine of compound growth. Albert Einstein even called it the eighth wonder of the world. Imagine a snowball. You start with a small snowball and roll it down a slope. Over time, more snow sticks to it, the ball gets bigger, and the speed increases.
Well, your investment return works exactly the same way. From 100 million, it takes 10 years to grow to about 400 million. That is a great result, isn’t it? But look, in the next 10 years, the jump is more than 1 billion.
The biggest acceleration takes place at the end. That is the magic of the time-driven compound effect.
The formula for equity wealth
This third engine really makes the difference: the potential for multibaggers. This is a fancy term for stocks whose value can rise many times over.
Not just a 100% increase, but 10, 20, or even 50 times. Frankly, you won’t find this kind of growth in gold or minerals. And this is no nonsense.
Look at Indonesia, for example. BBCA has increased in value 18 times. Imagine if you had invested in those companies.
The final engine, and perhaps a favorite of many, is dividends. So, when the company makes a profit, you are entitled to a share of that profit. That is what dividends are.
Imagine receiving a fixed salary from your company without having to work every day—wonderful, isn’t it?
To put that into perspective, let’s take a look at these figures. With a portfolio of 1 billion rupiah and an average dividend yield of 6% per year, you could passively earn 60 million rupiah annually.
You can use the money for your daily needs, or, if you want to be smarter, reinvest it to accelerate the compounding effect.
We have analyzed the four drivers. Now let’s look at how these theories are applied in practice by legendary investors who have proven their worth.
Of course, we must start with the legend. The recipe for wealth is actually very simple: buy a good company at a fair price and hold onto it forever.
In Indonesia, there is a figure whose success and philosophy are often given this nickname. He is Lelo Kenghong. His story is very inspiring, because he started completely from scratch as an ordinary bank employee.
With extraordinary discipline and consistency since 1989, he has focused on buying good stocks at lower prices than the market dictated.
The results are undeniable. His portfolio is now worth trillions of rupiah. And the pattern is always the same, wherever you look. You have the Hartono brothers with their long-term investments at BCA, and you have Ray Dalio, who has built a global investment empire.
There is only one common thread: they all use stocks, not to trade, but to hold the best companies for the long term. ***tok
