Very few forces in finance are as powerful as compounding. When dealing with debt, it can add insult to injury, but in investing, compounding can be credited with a lot of wealth creation. It’s great to earn a return on your investments, but it’s even better when that reinvested money earns a return itself. When you begin to understand the power of compounding, you begin to understand why starting to invest early and letting time work its magic is one of the best things you can do.
