"Compounding is when you invest money and your returns are reinvested, earning returns of their own, which can significantly increase your wealth over time."
"To see $45,000 turn into $4 million requires a long investment horizon of just over 47 years at a 10% return, illustrating the power of compounding."
Investing at a young age takes advantage of the power of compounding, allowing small sums to grow substantially over time. A $45K investment can potentially become $4 million if left to grow for approximately 47 years with a steady average annual return of 10%. This emphasizes the benefit of starting early: by saving early, one can greatly benefit from the exponential growth that compounding facilitates, reinforcing the importance of financial planning and disciplined investment strategies for retirement.
Read at 24/7 Wall St.
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