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Definition: This is the concept that you earn interest on the interest you have already earned. At first, your money grows slowly, but as time passes, your money grows more rapidly. This is often considered the "eighth wonder of the world."
StockJargon Advice: We're serious when we say that compounding can make you rich. In order to gain the full benefits of compounding, you need to keep your money invested for a prolonged period of time.
For the visual learners out there, here is a graph of the exponential growth rate associated with compounding:
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