“The most powerful force in the universe”

Albert Einstein, who knows a lot about powerful forces, is credited with recognizing that "The most powerful force in the Universe is compound interest."

Take a look at the effect of compounding over time on an investment of $1,000:

Annual Rate of Return	Number of years
	5	10	20	30	40
2%	1,104	1,219	1,486	1,811	2,208
4%	1,216	1,480	2,191	3,243	4,801
6%	1,338	1,791	3,207	5,743	10,285
8%	1,469	2,159	4,661	10,063	21,725
10%	1,611	2,594	6,727	17,449	45,259
12.5%	1,802	3,247	10,545	34,243	111,199
15%	2,011	4,046	16,367	66,212	267,864
17.5	2,240	5,016	25,163	126,222	633,162
20	2,488	6,162	38,338	237,376	1,469,772
23.5*	2,873	8,254	68,130	562,353	4,641,713

*Warren Buffett has a 23.5% compound annual return over 40 years.

• If you delay retirement investing for 10 years (start your retirement investing at 35 instead of 25), you reduce your investment return by 61.5% (based on a 10% annual return until age 65).
• If you reduce your return by 2% because of trading or mutual fund loads (getting 8% instead of 10%), over 30 years you reduce your return by 44.9%.

If you would like to see the impact of compounding on your investment portfolio, contact Visible Investment Advisors for a free consultation.