Is the process in which an asset’s earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. This growth, calculated using exponential functions, occurs because the investment will generate earnings from both its initial principal and the accumulated earnings from preceding periods. Compounding, therefore, differs from linear growth, where only the principal earns interest each period.
Compounding typically refers to the increasing value of an asset due to the interest earned on both a principal and accumulated interest. This phenomenon, which is a direct realization of the time value of money (TMV) concept, is also known as compound interest.
For example Compounding is what happens when you take a number and increase it over and over again by a percentage (think “10% annual growth”). That’s opposed to increasing it by a fixed number (think “add 10 each year”)
Check out this Free Compound Interest Calculator This calculator can really help you grow your investments with more precision.
For those who need more assistance here is this app called Acorns that i use that can help you invest and earn compound interest easily. Even tho the app does not work with cryptocurrency but you can surely save your money in Acorns and then you can further invest in Crypto when your ready.
How Can You Invest Money With Acorns?
Though in the past you might have needed hundreds (or thousands) of dollars to start investing, with Acorns, you can start investing with as little as $5. That’s thanks to something called “fractional investing,” a process that lets you buy tiny slivers of exchange-traded funds (ETFs) instead of having to buy whole shares, which can cost a lot of money.
These ETFs invest in thousands of stocks and bonds. This helps you keep your eggs in a lot of different baskets to decrease the likelihood you might lose money while increasing the chance you see steady growth. All this means your money can start benefiting from the wealth-generating potential of investing as soon as possible.
And how can I do that?
A few ways.
With Round-Ups, or the spare change left over from transactions, you can start investing each time you swipe a linked credit or debit card. Each coffee you buy for $2.75 becomes a 25-cent investment in your future.
To get started, just link your primary credit and debit cards to your Acorns account and make sure Round-Ups are enabled. Every time you swipe, we round up your purchase to the nearest whole dollar and collect the spare change. Once that change hits $5, we withdraw it from the bank account you linked and invest it in your Invest account. The exact amount invested from Round-Ups will generally be just over $5 but may be higher when the market is closed or the number of Round-Ups processed at once. On average, Acorns users currently invest about $30 a month through Round-Ups.
Haven’t turned on Round-Ups yet or want to update your settings?
See Round-Ups settings
If you want to supplement your Round-Ups and grow your money even faster—or if you’d feel more comfortable investing a set amount regularly instead—you can set up regular investments of $5 or more into your Invest account daily, weekly or monthly. That way you don’t have to worry about setting aside money from each paycheck to invest. With a Recurring Investment, you’re doing that automatically, helping you grow your wealth. Just set it and forget it.
Haven’t set up a Recurring Investment?
Set up Recurring Investment
Whether from birthdays, the holidays, tax returns or anything else, you may find yourself with a little extra cash from time to time. While you may not be ready to bump up the amount you invest regularly, you might still want to grow your money faster. With a One-Time Investment, you can schedule a one-time-only investment of any amount over $5.
If you’re like the average Acorns users, you’re investing about $30 per month through Round-Ups alone—or $360 a year!
I usually use my Acorns account to fund Birthdays, Christmas Gifts or Adventures that pop up.
Let me know if you know of any other Apps that can help you benefit from the compounding effect.
Email me with any question or if you have any ideas that i can post and help our community please share.
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