Compounding Growth

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• Introduction to compounding growth
• An example of how compounding growth works

Introduction to compounding growth

Compounding growth is one of the keys to successful saving. Its origins may lie in the esoteric world of finance, but anyone can make this magic concept work.

Basically, compounding growth refers to the growth of your savings by earning income on your income. That is, you reinvest your investment income, such as interest, and then earn money on that. So now, on one hand, you have your original savings and, on the other hand, you also have the savings from your investment income.

The longer your savings and investment horizon, the greater the impact of compounding growth.