Real Power of Compound Interest

I have a full follow-up coming in response to some of the questions I received on a recent post about how to get rich fast investing in the stock market. In that post, I showed how it is nearly impossible to get rich investing in less than a decade or two, unless you start out with a sizable amount of money in the first place.

The reason this is so shocking to people is that they hear all the time about the power of compound interest. While, it is true that over the long-term, compound interest is very powerful, it takes a long time to get going. Imagine the trickle of a mountain stream building slowly over miles and miles until it becomes the Mississippi River, and you get some idea of what the real power of compound interest looks like.

In the meantime, I stumbled across this instructive comic from xkcd.com about the power of compounding interest.

 

Example of how compound interest works as a comic.

2 thoughts on “Real Power of Compound Interest”

  1. Pingback: Stash Stock Back Card Review - Investing - The Finance Gourmet

  2. So true, it really does take quite a bit of time to see its full power, but if you are investing for the long term, that compounding growth will have a massive effect on your wealth. Just another reason to start saving and investing early I guess.

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