An Illustrated Guide To Compounding For Investors

Written by Jen-Li Lim Illustration by Toh She Yee

In partnership with

It’s almost impossible to avoid the concept of compounding when you’re learning about investing. That’s because the compounding effect is probably the most powerful force driving the growth of your investment portfolio.

But what does it actually mean?

Simply explained, the compounding effect describes how your investment returns produce more investment returns. Compounding allows your portfolio to grow at a higher rate over time since your returns continue to generate additional returns.

Still confused? Compounding can be difficult to grasp through words alone – that’s why we prepared an illustrated guide. View the infographic to learn more about compounding and how it can help you reach your financial goals.