“Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t…pays it.” – Albert Einstein
Compound interest is a simple, yet powerful concept. It involves earning interest on the interest you have already earned. If utilized properly, it can have a tremendous positive impact on your financial well-being.
Let’s illustrate this with an example…
In the example provided above, we can observe that Investor 1 saved for only 10 years. However, her advantage lies in the fact that she started saving 10 years earlier than Investor 2. Despite Investor 2 saving the same amount annually for 30 years, Investor 1 still managed to accumulate more wealth.
This serves as a clear reminder that when it comes to investing, time is your friend. The more time you have, the more advantageous it is for your financial growth and security. Save early and often… and if you think it’s too late, think again.
