The Power Of Compounding
The power of compounding can be compared to the snowball effect where you can see a small ball of snow growing larger as it rolls down the slope. In the same way, compounding helps in increasing your savings by accumulating more & more returns on the interest earned on the initial principal investment.
The most exciting effect of compounding is that it essentially earns ‘interest on interest’. Thus, it creates a chain reaction by generating returns on the returns. And this chain reaction is what helps us achieve our retirement goals.
0:00 Introduction
0:18 What Is The Power Of Compounding
1:39 Compounding Formula
2:51 Simple Interest Vs Compound Interest
3:59 Rule 1 - Make An Early Start
5:30 Rule 2 - Be Disciplined
7:01 Rule 3 - Patience Is The Key
7:56 Rule 4 - Go For Shorter Intervals Of Compounding
8:50 Conclusion