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Compounding is the eighth wonder of the world from "summary" of The Psychology of Money by Melody Jefferson,Morgan Housel
Imagine a force so powerful that it can turn a little money into a lot, and a lot into a fortune. This force is called compounding, and it's often referred to as the eighth wonder of the world. The concept seems simple enough - you earn interest on your money, and then you earn interest on that interest. But the magic of compounding lies in its ability to transform small, regular contributions into significant wealth over time. Compounding is not just about money growing exponentially, it's also about the passage of time. The longer you allow your money to compound, the more powerful it becomes. This is why starting early is crucial. Even small amounts invested consistently can snowball into substantial sums over decades. As Warren Buffet famously said, "My wealth has come from a combination of living in America, some lucky genes, and compound...
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