Power Of Compounding

The power of compounding is a fundamental principle in investing that allows your money to grow exponentially over time. It works by reinvesting earnings, so your investments generate returns not just on the original amount, but also on the accumulated returns. This snowball effect is most effective with a long-term investment horizon, where even small amounts can grow significantly.

For instance, investing ₹10,000 annually at a 10% return for 30 years can grow to over ₹19 lakhs, thanks to compounding. The earlier you start, the more time your money has to grow. Compounding rewards patience, consistency, and discipline in investing.

Investments like Mutual Funds, ELSS, and SIPs leverage compounding to build wealth systematically. Remember, time is the most powerful ally in compounding—start today and let your money work for you!

• Compounding basically is long term investment strategy which means to re-invest ones earnings from interest or dividend for receiving additional units.

• Higher rate of returns or longer investment duration plays a key role that leads to increase in principal amount.

• The benefit from compounding comes primarily from the fact that income keeps growing the principal to generate higher returns as time progresses.

• Hence, we can say that a successful investment planning is all about making the most of compounding by getting time on one’s side. Hence the earlier you start investing, the greater will be the power of compounding.