Compound interest allows your money to grow exponentially over time. Even small amounts can add up to large sums.
The earlier you start investing, the more compound interest works in your favor. Starting young lets it do its magic.
Compound interest multiplies your money faster because interest earns interest. The growth snowballs as interest gets added to the principal.
The compounding frequency matters. More frequent compounding results in higher returns over time.
Longer investment time horizons boost compound interest effects. The longer the time period, the greater the compounding.
Compounding works on any asset appreciating in value - stocks, real estate, cryptocurrencies, etc. It's not just for savings accounts.
Automatic reinvesting maximizes compound interest. Reinvesting dividends and earnings compounds your earnings.
The "Rule of 72" gives a shortcut to estimate compound growth. Divide 72 by the interest rate to see how many years to double your money.
Compounded growth accelerates over time in a nonlinear fashion. The beginning seems slow but then growth takes off.
Albert Einstein is quoted as calling compound interest the 8th wonder of the world. Its effects are powerful.