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It does much of the wealth-building for you and the sooner you get started, the better.
Retirement Investing and Compound Growth
You may know how compound interest works with a savings account.
Its when you earn interest on the money you deposit and on the interest you earn interest earning interest.
Compound growth works the same on your retirement investments.
You earn returns on your investments as well as your previous returns.
Then, you left your investment untouched for 50 years.
The following table highlights compound growths impact on a one-time $5,000 investment over 10 to 50 years.
These figures assume that you reinvest all dividends, and they arent adjusted for inflation.
How Many Years Do You Have Until Retirement?
In the table, notice how significantly the balance jumps every 10 years.
If you have 40 years, the difference is $390,175.
So if retirement is still decades away, theres no better time to invest than now.
The longer you leave your investment untouched, the more you benefit from the snowball effect of compound growth.
But it also might be more than you’re able to afford to invest right now.
Thankfully, you dont need $5,000 to begin.
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