The DRIP that became an Ocean — Retire early on 1% daily interest…
Compounding… the secret sauce to a successful retirement strategy. But what is it and how does it work? Albert Einstein is attributed as saying
“The most powerful force in the Universe is compound interest.”
I didn’t take much notice of this concept in my younger years, but, you can’t fault the maths! It’s the act of using the growth of something (your money in this case) to exponentially increase the rate of further growth. The sooner you start, the larger the eventual gains.
In the example below, say you had a saving account paying 6% monthly interest (I know these mythical animals don’t exist anymore!). Letting the magic of compounding do it’s thing, would allow you to double your investment within a year.
Imagine this interest supercharged at 1% a day. Now, 1% may not sound like much, but again with the magic of compounding this quickly adds up, turning an initial 1k investment into over 40k within a year and 1.4m within 2 years! Growth fuels further growth.