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How Does Compound Interest Work? A Powerful Incentive To Start Saving Early

Slide taken from Diamond NestEgg Sip & Save Financial Series: Investing Basics Workshop

 

Compound interest is a strong incentive for us to start saving and investing as soon as we can.

Assuming we had invested $1,000 over the past 30 years at an average annual market return rate of 7% we would have:

 

Save By Age Compounding Years End Value
25 40  $14,974
35 30 $7,612
45 20 $3,870

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Of course, we should only start investing if we have an emergency fund, paid off our debt and are putting away some savings towards retirement.

 

Join us for a financial workshop in NYC

Interested to learn more about investing? If you are in NYC tonight, join us for our “Investing 101” workshop. Sign up here: Sip & Save Financial Series: Investing Basics

 

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