Albert Einstein reportedly called compound interest “the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it.” Discover why this simple concept is the most powerful force in building wealth.
Compound interest means you earn interest not only on your original money, but also on the interest that money already earned. It’s like a snowball rolling downhill – it starts small, but quickly grows into something massive.
As your balance grows, the interest you earn grows with it. After many years, the interest can become larger than your own contributions.
Starting just 10 years earlier can make a bigger difference than doubling your monthly savings. Time is the fuel of compounding.
To harness compounding, you must reinvest your earnings. Spending the interest breaks the cycle and kills the snowball.
See how your savings can grow over time. Adjust the numbers and click "Calculate" to see the future value.
Adjust the values and click the button.
This assumes returns are compounded monthly and contributions are made at the end of each month. Real results vary with fees, taxes, and market fluctuations.