Albert Einstein once noted that the most powerful force in the universe was the principle of compounding. In investing, this manifests itself through something called compound interest. Put in its simplest terms, the phrase compound interest means that you begin to earn interest income on your interest income, resulting in your money growing at an ever-accelerating rate.
You can monitor the power of compounding with the duration of time you can leave your money to compound. The longer your money can remain uninterrupted, the bigger your fortune can grow. It's no different than planting a tree. Naturally, the tree is going to be larger when it is 50 years old than it was when it was 20 years old.
We are not telling you to hold all your investments for longer period of time as certain amount should be kept aside for achieving short term goals and meeting emergencies, but setting aside some part of your investments which you don't need immediately can be invested for longer period of time to witness the power of compounding.
As a beginner you need to plan your investments as per your goals & accordingly you can do your asset allocation. If you are unsure about how you can allocate your investments for short term & long term goals, then you may like to get connected to certified financial planners from our company who can advice you and can plan your investments based on your need analysis.
You can monitor the power of compounding with the duration of time you can leave your money to compound. The longer your money can remain uninterrupted, the bigger your fortune can grow. It's no different than planting a tree. Naturally, the tree is going to be larger when it is 50 years old than it was when it was 20 years old.
We are not telling you to hold all your investments for longer period of time as certain amount should be kept aside for achieving short term goals and meeting emergencies, but setting aside some part of your investments which you don't need immediately can be invested for longer period of time to witness the power of compounding.
As a beginner you need to plan your investments as per your goals & accordingly you can do your asset allocation. If you are unsure about how you can allocate your investments for short term & long term goals, then you may like to get connected to certified financial planners from our company who can advice you and can plan your investments based on your need analysis.
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