Why Albert Einstein Said "Compound Interest Is the Eighth Wonder of the World"
If you invest $3000 per year from 10 years before you turn 30, you would earn more money when you turn 70 than if you invest $3000 per year from 30 until 70.
That’s the power of compounding, because the amount earned grows exponentially over time. But keep in mind that the power compounding only works if you do not lose capital during the investment horizon.
What about compound interest in a negative interest rate world? To compound interest in the right direction, you need positive interest rates.
See “The Long-Term Impact of Compounded Returns”
Image: LPL Research
