The Power of Compounding: How Small Gains Grow Big Over Time

Compounding is one of the most powerful principles in finance, often called the "eighth wonder of the world." At its core, compounding is the process where earnings on an investment generate their own earnings. This creates a snowball effect—small gains accumulate and build over time into something substantial.

What Is Compounding?

Compounding occurs when the returns you earn on your money start to generate returns themselves. For example, if you invest $1,000 at an annual interest rate of 10%, you'll have $1,100 after one year. In the second year, you're earning 10% not just on your original $1,000 but also on the $100 you earned in the first year—giving you $1,210. Over time, this growth accelerates.

Why It Matters

The true magic of compounding is revealed over the long term. The longer your money is invested, the more powerful compounding becomes. That’s why starting early is key—even small amounts can grow dramatically if given enough time.

Example:

Invest $1,000 at 10% annual return

After 10 years: $2,593.74

After 20 years: $6,727.50

After 30 years: $17,449.40

Without adding a single extra dollar, your investment grows more than 17x in 30 years.

CryptoMarketCapBackTo$3T#BinanceHODLerHYPER