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Compound Interest. The snowball that keeps growing.
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Money SenseGL-00006
Compound Interest
The snowball that keeps growing
Interest that earns interest, so growth speeds up over time.
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Put 1,000 rupees in a 10% account and leave it. In 40 years it becomes 45,259 rupees. You added nothing. Interest earned interest on itself. The curve stays flat for years, then turns steep. Most people quit during the flat part. The reward goes to those who waited.
- The same force works in reverse: credit card debt at 36% interest doubles in about two years.
- Search "compound interest calculator" online and enter your age. The graph tells the whole story.
SourceStandard financial mathematics
Quote misattribution: O'Toole, Hemingway Didn't Say That (2017)
Quote misattribution: O'Toole, Hemingway Didn't Say That (2017)
Keep exploring
Because you read Compound Interest.
Money SenseGL-00007
The SIP
Small bets, long game
A fixed amount put into an investment on the same day every month.
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Money SenseGL-00016
The Ponzi Scheme
Returns from nowhere
A fake investment that pays old investors with new investors' money.
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Money SenseGL-00004
The Budget
Three numbers that run your money
A plan made before the spending starts, not after.
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