Investing Early, Investing Late – The Power Of Compounding Interest

As a kid, your parents would have probably taught you about saving money. You earn some, you save some and the cycle repeats. Parents taught this to us to allow us build a habit for saving money. This was in hopes that we would be able to save our income to help us accumulate some savings for our retirement. As we grew older however, we begin hearing about investments plans. So how does investments work? How does it differ from savings?

Well its really simple actually, the one core differences between saving and investing is growth. Savings when accumulated in a daily usage account or a savings account would grow at a snails pace or not at all if its a daily usage account. Investment on the other hand is all about growth. The simplest idea would be to buy something, wait for it to increase in price and then we sell it. So rather than letting your money sit in a bank, why not invest it?

So now a big question to answer in our lives is “When” should we start investing? Should we start investing early or investing later when we have more secured funds? Well here is the answer! Always start investing as early as you can afford to. Investment is basically creating another source of income, whenever you begin investing, you basically start earning more per week, per month, per year! Now allow us to introduce to you the factor that is the key reason why some peoples investment are more successful than others – “Compounding Interest”. Albert Einstein one of the father of science have once said “Compounding interest is the eighth wonder of the world, those who understands earns it, those who don’t pays it.”

Interest is basically the percentage returns we will receive when we make an investment. As new investors, you’ve probably heard the term ROI or return on investments. It would come in a percentage of your original capital ranging anywhere from 1-2% annually for traditional banks. Professional funds managers however are able to provide returns up to 20 or 30% depending on what you choose to invest in. Now compounding interest is when your investments generate some interest, the interest gained is reinvested into the original capital. Here’s a small table to help understand better.

For example, if the interest rate is 7% every month, the person invest an initial amount of $10,000 and withdraws the $700 every month they would only have a total of $18,400 at the end of 12 months. On the other hand, if the profit is reinvested every month for 12 months, they would have a return of $22,520 instead. This amount would only grow exponentially the longer the person invest.

As a fund management company, volofinance provide many services for investment. Our core specialty however would be forex and crypto investments. Our master traders here at volofinance are not only highly experienced but also equipped with latest trading AI to help them make calculated and precise decision in helping you make the most out of your investments.

As of date, our 5 main trading packages have made significant return on our investments. Below is a list of our trading packages and our returns.

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