Invest using monthly debit orders and watch magic happen
The basic principle of compound interest is that you earn interest on an ever-growing amount of capital
The benefits of using regular monthly debit orders are many, considering the workings of compound interest, rand-cost averaging and the creation of great investing habits. Albert Einstein called the magic of compound interest "the eighth wonder of the world". He famously stated that "he who understands it, earns it, and he who doesn't, pays it". The basic principle of compound interest is that you earn interest on an ever-growing amount of capital, as opposed to on the initial capital only, as when simple interest is applied. Think of compound interest as your profit - and when it compounds, you earn a profit on your profits. The other basic principle is that there's power in incremental growth and that the number of times the interest is paid the better. For instance, your long-term growth will be far higher if the interest is paid monthly, as opposed to annually. More to the magic There's more to the magic, which is that the number of payments you make also enhances growth. The mo...
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