When you leave your investments to grow over a long period of time, the magic of compound growth kicks in! The little seed you put in keeps growing and growing.
Early on, most of your investment portfolio is just from your savings. But as time goes on, that changes. After 10 years, the total contributions would be $60,000 and the portfolio would be worth $135,000, or about 2x the contributions. BUT after 40 years your total account value is over 13X your contributions!
THAT’s the massive power of time when it comes to compound growth. In the early years, not a lot of magic is happening. But as the years go on, you get growth on the growth and the numbers begin to snowball. As they say, the first 100K is the hardest to earn. After that they start coming faster and faster.
How do you take advantage of compound growth? Invest early and often. Even if it’s just a small amount. Get started. And let time take care of the rest. Your future (millionaire) self will thank you.
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Vivi & Shane