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Compound Strategy
When investing (unlike other things in life) time is your ally! Rule number one is time not timing. The earlier you start , the longer your money has time to grow for you.
Additionally, the more you invest each month (even if it’s just a small amount), the more your money is compounded every month. Compounding occurs when earnings accrue over time. Simply put, your account generates more earnings based on the growing balance. Compare the growth of three different monthly investment amounts over a 20 year period.
Assuming an 8% annual return, a $100 a month investment would have yielded a total of $58,931 over 20 years. A $250 monthly investment, assuming an 8% annual return, would have amounted to $88,397 more than a $100 a month investment. Better still, a $500 monthly investment , assuming an 8% annual return, would have grown to $294,657, 80% greater than a $100 monthly investment! The $500 investment, which yielded an 80% greater return was due to a greater monthly amount invested.
Quite simply, the more that is invested on a regular basis and the longer the investment horizon, the greater the potential for growth.
*Illustrations shown and returns do not reflect the results or performance of any particular investment or mutual fund.
**The funds do not offer tax advice. Since individual tax situations vary, this strategy may not be suitable for all investors. Please consult your tax advisor to see how this information pertains to you.
***Shares of a mutual fund are not deposits of, or obligations of, or guaranteed by, any bank or its affiliates, nor are they federally insured by the FDIC. Investments in the funds involve investment risk, including the possible loss of principal.
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