I came across a quote today that immediately went on my list of favorites. It sums up in two sentences why I think compounding interest is the most important idea in investing.
Building a portfolio can be overwhelming. There are thousands of mutual funds, ETFs, and stocks to choose from. There are also various ways to allocate your money between stocks, bonds, real estate, gold, and other investments. But there is also a simple allocation that will work for most people and get their portfolio up and running.
Compounding interest is one of the core principles of long term investing. The basic is the more often your investment compounds, the greater your investment will become, and your investments will grow at a faster rate over time.
Defining your financial goals, creating a budget, and reducing expenses is the first step to becoming financially secure and investing in your future.
