Float Redeployment — Power of Monthly Compounding

Suppose you’ve extracted $10,000 of capital from a stock position using the Capital Extraction Framework. The question now: what happens if that cash doesn’t sit idle?

If the released float is redeployed to earn between 1 % and 3 % monthly and the income is reinvested each month, compounding quickly turns modest monthly yields into a powerful growth engine. The illustration below shows how the same $10,000 can grow over 24 months.

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Compounding Results on $10,000

Monthly YieldFuture Value (24 mo)Total GainAnnualized CAGR
1.00 % $12,697.35 $2,697.35 12.68 % / yr
1.50 % $14,295.03 $4,295.03 19.56 % / yr
2.00 % $16,084.37 $6,084.37 26.82 % / yr
3.00 % $20,327.94 $10,327.94 42.58 % / yr
Even at 1 % monthly (≈ 12.7 % annualized), $10,000 grows to about $12,697.35. At 3 % monthly, the same float compounds to nearly $20,327.94. The difference highlights why redeployment velocity and consistent compounding are central to the Framework’s long-term performance.

Why Compounding Matters

The Framework’s goal isn’t just to extract trapped capital — it’s to keep that capital working. Each month of reinvestment increases your base for the next cycle. Over multi-year horizons, this snowballs into a permanent structural edge, independent of daily market swings.

⬅ Prev Case: VLO — Turning Losses into Productive Float

Disclaimer: Educational illustration only; not investment advice. Actual results depend on execution, risk, and compounding consistency.