Compound interest is the way your money grows when you earn interest not just on your initial investment but also on the interest you’ve already earned. Think of it as your money-earning interest on autopilot – and who doesn’t love the sound of that?
Here’s a simple way to understand it: imagine you plant a tiny seed in your garden. Over time, that seed grows into a plant, producing more seeds, which grow into more plants.
Compound interest is like that process for your money. Your initial investment grows, and as it grows, it generates even more growth. It’s a financial snowball effect, and it can make a difference in your financial journey.
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