It is the latter years of compounding that really makes a noticeable difference – the early years provide benefits little by little, laying the necessary foundation for later reward.
The later years provide significant jumps due to the exponential nature of compounding.
Compounding applies in many ways when it comes to wealth creation.
It impacts on debt repayment, investment creation, future superannuation balances, the impact of fees and charges on investment returns, and in many other ways.
To enhance your understanding of the power of compounding, we present the following examples.