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How to take advantage of compound growth

Saving earlier can help give you the power of compound interest on your savings

Saving money can be a challenge, but starting early can help.

Did you know that with a regular savings plan in place, and an early start, you could be much further ahead when it’s time to consider retirement?

That’s because when you start saving early, your money has more time to grow and benefit from compound growth. Compounding can help your money grow, in most cases, far beyond the amount you originally invested. So, how does it work?

Compound growth is similar to compound interest. With compound interest you’re earning interest on interest. You earn interest on the money you put in at the start, as well as the money you add later, plus on all the interest that collects over time. This gives you a larger total amount to earn future interest on, leading to even more growth. Over time, you have a powerful recipe to help you grow your money.

The idea of compound growth is like growing a forest of trees. The forest can grow in two ways – trees are planted by hand (like your regular investments), while others may grow on their own through seeds that fall from larger trees (like compound growth on your money). In time, a few trees planted early can grow into an entire forest without much effort.

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