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Embrace the power of compound interest in building wealth over time from "summary" of The Four Pillars of Investing: Lessons for Building a Winning Portfolio by William J. Bernstein
Compound interest is a magical force that can work wonders when it comes to building wealth over time. The concept is quite simple: when you earn interest on your initial investment, and then earn interest on that interest, your money can grow exponentially. This means that the longer you invest, the more powerful compound interest becomes. Imagine you invest $1,000 in the stock market and earn a 10% return in the first year. You now have $1,100. In the second year, if you earn another 10% return, you will not only earn $100 on your initial investment, but an additional $10 on the $100 interest you earned in the first year. This cycle continues as long as you keep reinvesting your earni...
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