I've Studied Compound Interest for 10 Years. It's Still the Best Wealth Builder I Know.
The media may hype up passive income, but buying and holding appreciating assets is the better move over the long haul.
Overview
I love compound interest, especially in the stock market. It allows me to set aside savings that can appreciate without any extra work on my end. If the stock pays a growing dividend, I can earn a growing stream of income year after year, depositing it into my bank account. What could be better than that?
The key to the stock market is compound interest. Over 10 years (or even much longer), this is the best wealth builder, helping you build a nest egg for retirement or whatever your goals are. Compound interest is magic, and anyone can implement it with their retirement savings by investing in the stock market. Here's how.
Details
Almost everyone will know how interest income works. You may have a bond, certificate of deposit, or any other savings account that pays you a percentage on your savings every year, perhaps at a fixed rate every period.
Source
Originally published at www.fool.com.