Beginning to invest early can notably increase wealth due to the benefits of compound interest. This concept implies that not only the principal amount but also the accumulated interest generates more returns over time. Additionally, investing early allows individuals to weather market volatility better. The article emphasizes the importance of starting as soon as possible, particularly illustrating potential gains through an example involving stock purchases. While it encourages early investment, it acknowledges the need to address high-interest debt and establish emergency savings first.
The sooner you begin investing, the more time your money has to grow. Compound interest is not only paid on your principal but also on the interest you've accumulated.
Imagine that you've always admired the Acme Brick Company... If you'd purchased stock when you were 25, you could have gotten it for $25 a share. Now, 10 years later, it's $70 a share.
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