The Power of Starting Early

Time is the biggest advantage in long-term investing. Here is how compounding rewards early savers, with side-by-side numbers, and the tax-advantaged accounts that make it easier.

Compounding needs time

Compounding means your returns earn returns. In the early years, growth looks slow. Later, the growth on past growth becomes larger than your contributions. The longer the runway, the more of your final balance comes from growth instead of from money you put in.

Compounding: growth builds on growth, and the curve steepens over time.

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