Start investing early to benefit from compounding from "summary" of The Investment Answer by Gordon Murray,Daniel C. Goldie,Gordon S. Murray
Investing early is crucial if you want to benefit from the power of compounding. Compounding is the process of your money earning returns, and then those returns earning their own returns. The earlier you start investing, the longer your money has to compound. This means that even small contributions made early on can grow substantially over time. Imagine you invest $1,000 at an annual return rate of 5%. After one year, your investment would grow to $1,050. If you leave that money invested, the following year you would earn 5% on $1,050, which is $52.50. Over time, this compounding effect can lead to significant growth in your investment portfolio. The key to benefiting from compounding is to start early. By starting to invest at a young age, you give your money more time to gr...
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