“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”  ― Albert Einstein

So what is the eighth wonder of the world, Compound Interest/Growth  Simply put, compounded interest is interest on top of interest and compounded growth is growth on top of growth.

If you invested $100 today and the stock market grew at an average compounded annual growth rate of 9.11% your investment would be worth:

• $100 with a 9.11% compounded annual growth rate invested for 10 years = $239
• $100 with a 9.11% compounded annual growth rate invested for 20 years = $572
• $100 with a 9.11% compounded annual growth rate invested for 30 years = $1368
• $100 with a 9.11% compounded annual growth rate invested for 40 years = $3270
• $100 with a 9.11% compounded annual growth rate invested for 50 years = $7820

The longer your time horizon the more material the result.  Put the eighth wonder of the world to work for you, rather than you working for it!

Why did I choose 9.11%?  Well, the S&P500 had an average compounded annual growth rate of 9.11% from 1871 to 2015.

Historical S&P500 data sourced from www.moneychimp.com