Want to turn a little money into a lot more later? You most likely are. You're looking in the right place. With little money, one of the few methods to accumulate significant wealth in a lifetime is through the stock market.
Let's use the S&P 500 as a proxy for the overall stock market for simplicity. Individual stocks may lead to riches, but it's simpler — and frequently just as productive — to invest in the S&P 500.
The treatment of your investment is one. Profits must be immediately reinvested. dividends as well.
Compounding This strategy guarantees that you have as much money working for you as long and frequently as possible because you receive future benefits based on prior earnings rather than simply your initial principle.
Check out the development graph for the $20,000 investment. In the last seven years, the $330,000 net gain was split in half. You would have just over $160,000 if you invested $20,000 for 23 years.
If your retirement is mostly funded by your nest money, that is a significant difference. This suggests that you should start investing young.
David A. Arnold, a comedian, actor, writer, and producer, died at the age of 54.