As kids we learn that doubling any small number continuously will eventually lead to an astronomical number. However even as adults, it can be difficult to visualize just how quickly a compounding growth is.
Take for instance something that grows 10% a year. Each year, it gets just 10% bigger than the year before.
By the 7th year, it would have already doubled in size. And on the 14th year, it would have quadrupled in size.
Now imagine a wealthy person worth $10 million today. If his wealth had been growing at 10% a year, he would have $5 million just 7 years ago.
But he would have needed 17 years to get from $1 million to $5 million.
Such is the mystery of compounding growth.
This is the reason for the adage: it is more important to stay invested than to time the investment.
Of course it goes without saying: quality of the investment matters. It is not easy finding something that gives a respectable return for 10, 15 or 20 years. US equities is an outlier performer in the global market.
The Finance Durian 