Compounding
Also known as: Compound Interest, Compound Growth
The process where investment earnings generate their own earnings over time, leading to exponential growth.
Detailed Explanation
Compounding is the ability of an investment to generate earnings from both the original principal and previously earned interest/returns. Often called the '8th wonder of the world', compounding accelerates wealth creation over time. The longer the investment period, the more powerful the compounding effect becomes.
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