- Knowledge Centre
One of the most important concepts for investors to grasp is compounding.
It’s the principle on which most great fortunes are built...
And it’s far more powerful than you might imagine.
Compounding is the return on your returns.
It’s what mathematicians call a geometric progression.
And the curve only gets steeper over time.
On the day your child is born, you invest £5,000 using a low cost, systematic investment approach.
Let’s say that investment returns 10% per year.
On the first day your child can legally retire — on their 55th birthday — they’ll have £945,000 in their account.
From that one initial investment.
Left over the long-term, diversified and using low cost funds....to ensure maximum returns.
So, whether you are investing for family or simply your own retirement...
Harnessing the power of compound interest early is key.
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