Articles on Stock markets

News, Research and Analysis

Help Center
Introduction
Investment Portfolios
Investment Terminology and Instruments
Technical Analysis and Trading
Cryptocurrencies and Blockchain
Retirement
Retirement Accounts
Personal Finance
Corporate BasicsBasicsCorporate StructureCorporate FundamentalsCorporate DebtRisksEconomicsCorporate AccountingDividendsEarnings

What Des 'Compounding' Mean?

Compounding refers to when your asset generates interest, and then that interest is reinvested to create additional interest on the now larger amount.

Put simply, it’s when your earnings generate additional earnings.

Albert Einstein once referred to compound interest as the “greatest mathematical discovery of all time.”

Compound interest only requires two things to work: interest and time. Long-term investors that can resist the temptation to touch any of the principal or interest over the life of their investment are sure to reap the magnificent rewards of compound interest.

Keywords: assets, compounding interest, interest, earnings, reinvested interest,