COMPOUND INTEREST INVESTMENT
Compound interest is one of the strongest tools you have for long-term growth. It allows your money to earn interest, and then that interest earns more interest.
Over time, that snowball effect becomes powerful.
Here’s an example of what happens when you save $200 a month for 35 years:
At 3%, you end up with about $148,680.
At 6%, your savings grow to roughly $286,370.
At 12%, the total jumps to more than $1.3 million.
The earlier you begin, the more time compound interest has to work in your favour.
RULE OF 72
The Rule of 72 is a quick way to estimate how long it takes for your money to double.
Just divide 72 by the interest rate you expect to earn, and the result gives you the approximate number of years needed for your investment to double.
For example, a single $10,000 deposit will double far more times at 12% than it will at 3% over the same period. The difference in growth is dramatic.
It’s worth asking yourself: How many doubling periods do you have left in your lifetime?
The Power of Starting Early
"Wealth gained hastily will dwindle, but whoever gathers little by little will increase it." - Proverbs 13:11
🔵 Investor A (Started at 25)
Started with 6% contribution, increased 1% annually to 15%
🟢 Investor B (Started at 40)
Steady 15% contribution from day one
💡 The Takeaway:
The difference between starting at 25 vs 40 isn't just 15 years; it's compounding cycles. Investor A's early start allows for exponential growth that cannot be matched by higher contributions alone.
Understanding the Rule of 72
Formula: 72 ÷ Annual Rate = Years to Double
| Annual Return | Years to Double | Example Growth |
|---|---|---|
| 4% | 18 years | $10,000 → $20,000 |
| 6% | 12 years | $10,000 → $20,000 |
| 8% | 9 years | $10,000 → $20,000 |
| 10% | 7.2 years | $10,000 → $20,000 |
| 12% | 6 years | $10,000 → $20,000 |
See Your Money Double Over Time
8% Annual Return (Doubles every 9 years)
10% Annual Return (Doubles every 7.2 years)
🕰️ Time is Your Greatest Asset
Starting at age 25 gives you 4-5 doubling cycles by retirement. Starting at 40 only gives you 2-3 cycles. That's the difference between building substantial wealth and just getting by.
⚠️ Important Disclaimers:
- Investment products are not FDIC-insured and may lose value
- Returns are based on market performance and are not guaranteed
- The Rule of 72 is an estimate for educational purposes
- Past performance does not guarantee future results
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THE COST OF WAITING TO SAVE FOR RETIREMENT
If your goal is to reach $1 million by age 67, time is your greatest advantage. The earlier you begin, the lighter the monthly commitment.
Here’s what it looks like:
Start at 27, and you’re setting aside about $214 each month.
Start at 37, and that jumps to around $541.
Start at 47, and now you’re looking at roughly $1,491 a month.
Start at 57, and the cost rises to about $5,168.
Start at 62, and you’d need to save about $13,258 every month to hit the same target.
Waiting makes the journey harder and far more expensive. Starting early keeps the monthly burden manageable and puts compound growth to work for you. Don’t let delay become the most expensive part of your retirement plan.
