What Is The Magic Of Compounding?

Compound interest is an investor’s best friend. Compounding is simply when the money you earn starts earning money. This means your stash is growing faster than if you were simply adding a lump sum every month.

And you can now learn all about this through our compound interest calculatorwhich shows you exactly what the magic of compounding can do.

So many people say “I can’t afford to start investing.” The truth is, you can’t afford not to start investing, because time is the issue here, not money. Compound interest is the real silver bullet when it comes to growing your wealth and the earlier you start, the more powerful it becomes. 

  • Compound interest is when the money you earn starts earning money.
  • Compounding is the easiest way to become wealthy.
  • The sooner you begin investing, the more time your earnings have to compound.

A certificate of deposit (CD) or a government bond over time might give you 5% per year. A 10% annual return is the historical average for the stock market. And 15% is what you could get if you learn how to pick your own stocks and take advantage of the skills MyWallSt teaches.

The majority of people subscribe to some form of online entertainment service like Spotify Premium or Netflix – a lot subscribe to both. The $18 leaves our bank accounts every month and we hardly even notice.

Let’s say at 18 years old, you subscribe to both services and remain a loyal customer for the next 50 years. You’ll end up retiring $10,800 down. “Small price to pay for being able to binge watch Breaking Bad,” I hear you say. 

Make smart stock investing decisions without the hard work

“Easy to use app with great information about each company, they do all the hard work so you can just choose where to invest”

Make informed investments

Had you stuck that $18 into a savings account instead you’d have that $10,800 when it comes to retiring, plus some interest. Of course, inflation will have eaten up a huge chunk of that, so it’s hardly worth giving up the comfort and convenience of your subscription accounts. 

Had you invested that money, after year one, on average, you’re up 10% on your original investment. The year after, you make interest on your interest and so on. It’s like adding successive layers to a cake with each a little larger than the last. So if you’d consistently invested that money, after 50 years it would be worth over $300,000. 

Still think you can’t afford to start?

Want to know more about compounding?

  • What is compound interest?
  • The magic of compound interest

MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here

Get Started
Emmet SavageEmmet Savage
  • Emmet Savage
  • Chief Investor and Co-founder at MyWallSt

  • Emmet’s first stock was Dell Computers, but it’s not his favorite anymore! That honor goes to Tesla, who is producing user-centric products for a global customer base.

Read More

Want to think like an investor? Our best investing blogs will give you the edge on your investing journeyWant to think like an investor? Our best investing blogs will give you the edge on your investing journey

7 Best Investing Blogs 2022: Think Like an Investor

In this segment of our ‘Think Like an Investor’ series, we’re going to look at another resource which proves invaluable to the modern investor: blogs.

Get Started
Michael O'MahonyMichael O'Mahony
  • Michael O’Mahony
  • Apr 21, 2022

Best Investing PodcastsBest Investing Podcasts

11 Best Investing Podcasts 2022: Think Like An Investor

We’ve listed our favorite investing podcasts below, ones we use for news, others for inspiration, and others even to switch off to on the commute home.

Get Started
Michael O'MahonyMichael O'Mahony
  • Michael O’Mahony
  • Apr 19, 2022

Welcome to 5 Merrion RowWelcome to 5 Merrion Row

Why Is Company Culture So Important For Investors To Look At?

When an investor considers buying shares in a company, it’s important to understand ALL the ins and outs, including company culture.

Get Started
Jamie AdamsJamie Adams
  • Jamie Adams
  • Apr 12, 2022

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button