Posted by One of the most underrated and powerful tools an investor can utilise is time itself. Used well, it can mean the difference between achieving genuine financial freedom and a life of missed opportunity.
A little while ago, standing in Rome and looking up at the Pantheon, I found myself thinking about permanence. These structures have stood for thousands of years and witnessed wars, empires, and economic crises. And yet, there they are.
To my mind, the best investments share something of that quality: carrying on, quietly compounding in value, year on year.
This week, I’m sharing a few ideas I think every investor should understand, no matter what stage they’re at.
The Eighth Wonder of the World
Albert Einstein is often credited with calling compound interest “the eighth wonder of the world.” Whether or not he actually said it, the sentiment holds. The power of compounding is genuinely staggering once you see it play out.
Put 10,000 into an account earning 8% annually, and in 30 years you’ll have around 100,000, without ever adding another penny. Wait a decade before starting, and the same investment over 20 years leaves you with just 46,000. Can a 10-year delay really cost you more than half your final pot?
Why the maths works the way it does
With compound interest, you earn returns not just on your initial investment, but on all the returns you accumulate over time. Think of a snowball rolling downhill: it doesn’t keep going at a steady pace, but gathers speed the further it goes.
In year one, your 10,000 earns 800 at 8%. In year two, that 8% applies to 10,800, earning you 864. By year 20, your annual interest has grown to over 3,000. By year 30, that single year’s return is over 7,000. The growth doesn’t just continue… it explodes.
It’s worth noting that the current interest rate environment, with savings accounts and bonds offering meaningfully higher returns than they did for much of the 2010s, makes compounding even more relevant today. Even relatively cautious investments are now working harder for patient investors willing to play a long game.
Time in the market vs. timing the market
The second concept I want to highlight is something I call the 10-year wealth rule. Most experienced investors will tell you: you rarely make money by trying to perfectly time your entry into the market. You almost always make money simply by being in the market.
In property, a solid rule of thumb is that your asset will typically double in value every 10–15 years. That’s the average. You can beat it with the right location or deal structure, just as you can fall short in the wrong one. But over a long enough horizon, the direction of travel is almost always upward.
As an example, take the first property I ever bought. It was a small mews house and I paid 85k for it in 1993. Twenty-two years later, I sold it for 750k, so practically a 10x return. I didn’t do anything clever with it. I just held it. That’s the power of time in the market.
72: The magic number?
The Rule of 72 is one of the most useful back-of-a-fag-packet calculations in investing. Divide 72 by the annual return your property generates (your yield), and you get the number of years it will take for your money to double.
Say your yield is 6% per year. 72 divided by 6 is 12, so that’s how long it should take to double your money, regardless of the purchase price. Find a property returning 10%, and that timeline drops to 7.2 years. Same formula, enormous difference.
That’s why yield deserves far more attention than most investors give it. Price tends to get all the focus: people worry about whether they’re paying too much. But yield is what determines the speed at which time works in your favour. A disciplined focus on finding high-yielding properties, and being willing to walk away from average ones, is one of the most powerful things you can do to accelerate your returns.
The 18-year cycle
When I first heard about the 18-year real estate cycle, I dismissed it. It’s the widely-held theory that property markets move in roughly 18-year rhythms: seven years of recovery after a crash, seven years of steady growth, a bubble phase, then a crash lasting around four years.
But there’s some striking historical data. The 2008 crash bottomed out around 2012. From 2012 to 2019, we saw seven years of upward movement. By 2019, many analysts were flagging overheating. When you look back further, the pattern holds. The crash before 2008 occurred around 1990, during the UK currency crisis, followed by recovery from 1994, and then a surge from 2001 onwards, partly fuelled by Ireland joining the Eurozone and rates dropping from 7-8% to just 1-2%. The bubble ran until 2008.
I’m not saying this is a crystal ball, and I’m not willing to definitively say where we are in the cycle right now, because nobody can say that with any real certainty. What I will say though is that understanding the pattern exists, and roughly how it works, is genuinely useful. It encourages you to think in longer timeframes, to stay calm when others are panicking, and to be cautious when everyone around you seems to be making easy money.
If you’re curious about where current thinking places us in the cycle, there’s plenty of informed commentary out there worth reading. Just remember to be selective about who you listen to.
One good deal per year
One of the best pieces of discipline I’ve developed over time is focusing on one exceptional deal per year rather than chasing multiple average ones. Spreading yourself thin never really ends well, as I’ve talked about before on the podcast and in my blogs.
I’ve had deals that returned 2.5 million in six weeks. If that had been my only transaction that year, it would have been a phenomenal year. But I also did other deals in that period which lost money. Looking back, less would have been more.
The honest truth is that you never know in advance which deal will be the standout. But you can develop the judgment to identify genuinely exceptional opportunities, and the discipline to say no to everything else. Patience is a skill, and in investing, it’s one of the most profitable ones you can develop.
A nugget of personal wisdom
As you get older, you might find yourself viewing time differently than you did at 20. Time passes more quickly, and you feel more urgency to get things done. A sense that the clock is ticking.
That urgency just doesn’t exist when you’re younger. My advice is to try and borrow some of it early. If you’re trying to build financial freedom, get started as soon as you can. Your future self will thank you for the sacrifices you make today.
Time is your greatest asset. Invest it wisely, in the most important people, activities and achievements in your life, and build a legacy like the Pantheon: one to stand the test of time.