We humans have a bad habit of thinking the moment will last forever.

Romantic infatuations look like “the one” in our short-term mindsets. Pointless purchases look like items that will fulfill us forever. And too many investors expect this bear market to be around for the long term.

Nothing ever lasts forever. And it’s rare to find a concept or creation that is actually reliable. Rare, but still possible, nonetheless.

Take the Great Pyramid of Giza in Egypt. The only one of seven ancient wonders that still exists today, it was built in the early 26th century B.C. You can see it yourself – if you care to spend precious money on a vacation and brave the unreliable airways.

Or, for an equally impressive, long-lasting sight, you can tap into the “eighth” wonder of the world… the simple strategy that’s been repeatedly proven to grow your money like no other force in the world.

There’s a quote about it that’s attributed to Albert Einstein, though no one’s quite sure who really said it:

“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”

This is something my dividend-loving team and I at Intelligent Income Daily actively benefit from today – and have been for quite some time. In fact, we intend to benefit from this for decades to come… straight up until our retirements and beyond.

Today, we want to share it with you, including the three-part strategy that takes it to the next level of reliability.

Compounding Creates Wealth If You Know How to Wield It

Depending on your degree, you may have learned how compounding works in school. But for those who didn’t take that course, let’s break it down with a simple example.

When you put money in a savings account, you earn interest. And if you let that interest sit there, you start earning interest on your original money AND on the interest you previously earned.

This means you end up receiving even more interest, allowing your savings to snowball. The longer you keep that cycle rolling, the more “snow” it collects until you’ve got something seriously substantial to rely on.

But here’s the thing: It can get better still.

You see, my team and I have been through every kind of market you can think of – high-flying bulls, gut-wrenching downturns, and dull stretches that don’t go anywhere.

That’s how we’ve learned the best strategies to building wealth regardless. These are the investments with the highest likelihood of boosting your bottom-line year after year. No matter what.

It involves staying invested in strong stocks through thick and thin… allowing the eighth wonder of the world to prove itself yet again.

The Kind of Triple Threat I Like to See

As awe-inspiring as compounding is, it really can be broken down into three easy steps that make it even more wonderful…

Step 1: Target a company with strong fundamentals and growth.

When you buy stock, you buy part of a business that’s supposed to grow over time. So, if the business made more money and became more valuable (as our picks almost always do)… your initial investment will be worth more.

That stock price appreciation is the first way you can make money investing and is the basis of our compounding model.

Step 2: Focus on dividend-paying stocks that increase their earnings consistently.

With dividend stocks, companies return some of their profits to shareholders through scheduled payouts, or dividends. We target the companies that know how to grow that intake, which then allows them to grow their dividends as well.

Since 1926, dividend stocks have contributed approximately 32% of total returns for the S&P 500. That’s why our Intelligent Income Investor newsletter targets these kinds of stocks specifically.

Stay tuned for more about that soon!

Step 3: Let compounding work for you.

Once a company pays you a dividend, you can use that extra money to buy more of its shares. And more shares mean more stock appreciation… and more dividends that increase over time.

Suppose you invest in a company that returns 7% in dividends each year. After 30 years, you would have tripled your money. But, if you had reinvested those dividends back into the company each year, after 30 years you would have more than 7.5X your original investment. That’s the power of compounding at work.

Again, there’s a reason why it’s called the eighth wonder of the world. Because the effects can be truly phenomenal.

All put together, these steps create a cycle that builds up your wealth at an exponential rate. Put them into play the next time you’re looking to purchase shares in a company, and you have no idea the other amazing sights you could see.

Happy SWAN (sleep well at night) investing,

Brad Thomas
Editor, Intelligent Income Daily