The Power of Compound Interest
The Power of Compound Interest
The Power of
Compound Interest
Understand why time is your greatest ally.
Compound interest is when you earn interest on both your original investment and the interest it has already earned. This creates exponential growth over time.
The Time Value of Money (TVM) means a dollar today is worth more than a dollar tomorrow due to its earning potential. The earlier you invest, the more your money can grow.
Compound interest is when you earn interest on both your original investment and the interest it has already earned. This creates exponential growth over time.
The Time Value of Money (TVM) means a dollar today is worth more than a dollar tomorrow due to its earning potential. The earlier you invest, the more your money can grow.
Compound interest is when you earn interest on both your original investment and the interest it has already earned. This creates exponential growth over time.
The Time Value of Money (TVM) means a dollar today is worth more than a dollar tomorrow due to its earning potential. The earlier you invest, the more your money can grow.
Let's imagine three friends: Alex, Jamie, and Taylor. All three are 20 years old today and are thinking about whether they should start investing $50 per month into the U.S. stock market. They all plan to retire at age 65, but they all make very different decisions about when to start investing.
Alex: Starts $50 Monthly Contributions at age 20
Jamie: Starts $50 Monthly Contributions at age 30
Taylor: Starts $50 Monthly Contributions at age 40
Let's imagine three friends: Alex, Jamie, and Taylor. All three are 20 years old today and are thinking about whether they should start investing $50 per month into the U.S. stock market. They all plan to retire at age 65, but they all make very different decisions about when to start investing.
Alex: Starts $50 Monthly Contributions at age 20
Jamie: Starts $50 Monthly Contributions at age 30
Taylor: Starts $50 Monthly Contributions at age 40
Let's imagine three friends: Alex, Jamie, and Taylor. All three are 20 years old today and are thinking about whether they should start investing $50 per month into the U.S. stock market. They all plan to retire at age 65, but they all make very different decisions about when to start investing.
Alex: Starts $50 Monthly Contributions at age 20
Jamie: Starts $50 Monthly Contributions at age 30
Taylor: Starts $50 Monthly Contributions at age 40
Alex, who had begun investing 10 years earlier than Jamie and 20 years earlier than Taylor, would have obtained a portfolio value more than double that of Jamie's and nearly quadruple that of Taylor's. Start investing early to maximize growth.
Alex, who had begun investing 10 years earlier than Jamie and 20 years earlier than Taylor, would have obtained a portfolio value more than double that of Jamie's and nearly quadruple that of Taylor's. Start investing early to maximize growth.
