Power of Compounding Interest

Albert Einstein, not to be confused with Ben Stein, was famously quoted for saying that “compound interest is the most powerful force on earth”.

It is the act of earning interest on interest on interest over a long period of time. Imagine, at 8% per year, $100 put aside per month would grow to be approximately $59,000 in twenty years. Set aside $500 per month and they will be touring your “crib” on MTV. Einstein was the genius of his time, however it doesn’t take a genius to be wealthy when you let your money work for you.

Test out a Compound Return Calculator and see what your investments could grow to (8% growth Rate): Compound Return Calculator

compounding interest

Neither simulations nor past return performance are necessarily indicative of future returns. Based on a hypothetical 8% rate of return average over 20 years after fees and expenses. This chart is intended for illustrative purposes and is not intended to indicate that your investment will return 10% per year. A client’s return with respect to an investment would be reduced by any fees or expenses a client may incur in the management of its investment advisory account.