Reinvestment is the repeated investment of the received funds. If we use the example of your own garden, it means using the crop as a source of seeds, finding a field and planting even more vegetables and fruits. As the result the investor receives more income. The new crop can be sold, eaten or reinvested.
Reinvestment is actively used by financial organizations. In theory, constant reinvestment can be an effective tool for increasing one’s wealth with minimal initial investment.
Usually, this strategy is chosen by people who focus on long-term planning. You cannot take advantage of investment results right away, but eventually you will get much more value.
It can be illustrated by an example of a trip to the forest to collect mushrooms and berries.
Usually, it requires a lot of time, and the food is eaten in only a few days. But if you plant berries and mushrooms, you can grow a lot more food and provide yourself with a part of these products for a long time.
Financial and cryptocurrency organizations offer many reinvestment options.