One of the most overlooked forces in personal finance is compounding — the process by which your earnings generate additional earnings over time. It’s simple in concept but powerful in effect, turning modest, consistent returns into substantial wealth when given enough time.
For example, an investment that earns just 6% per year will double roughly every 12 years. The earlier someone begins investing, the more those gains snowball, creating exponential growth without any extra effort. This is why long-term investors often focus less on short-term market movements and more on time in the market.
The key to harnessing compounding is consistency. Regular contributions, reinvested dividends, and patience form the foundation. Whether saving for retirement, a home, or financial independence, compounding rewards those who stay invested — not those who try to predict the perfect moment to enter or exit the market.
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