The one thing that most of the investors neglects is “Giving time to their investments”. If you start investing early and hold-on the investments for long term, you will be benefitted with “Power of Compounding”
What is Power of Compounding?– Compounding means adding interest to the principle and re-invests the accumlated corpus till the end of the tenure.
To benefit from power of compounding, you have to “Give Time To Your Investments”. Interrupting the principle frequently erodes the compounding power.
According to Albert Einstein “Compound Interest is the 8th wonder of the world! He who understands it, earns it; He who doesn’t pays it”
The above statement proves the importance of compounding. Those who understands the compounding power bags multiple-fold returns when compared to who doesn’t.
If an investor frequently churns his portfolio, he may end-up loosing compounding power. So identify the products which gives compounding(PPF, Equity Mutual Funds, Recurring Deposit)and hold for long term.
You may check online calculators of PPF, Recurring Deposits, Equity Mutual Funds and you would surprised to see such a huge corpus, That’s the magic of compounding!
So don’t neglect power of compounding and enjoy the fruits later especially during your retirement!
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