What could $150 a month become over several decades? The answer is a great illustration of why compound interest is such a powerful concept in personal finance.
But there’s more to compounding than watching an investment balance grow. Time, contributions, returns, and even debt can all interact in ways that many people don’t fully appreciate.
In this infographic, I cover some of the most important things beginners should understand about compounding. If you’re just getting started with investing, this is one concept worth understanding early.
