Walmart Stock – 3 Simple Ways Investing Can Double Your Money | Smart Change: Personal Finance
Reinvesting your dividends can help you grow your portfolio without investing any additional cash out of pocket. Then once you’re collecting a decent amount of money in dividends, you can start cashing them out to create a source of passive income.
3. Let compound interest work its magic
Compound interest is what helps your money grow over time. You’re essentially earning interest on your interest, so the more time you have to save, the more you can potentially earn.
Say, for example, you’re investing $100 per month and earning a modest 7% annual rate of return on your investments. Here’s approximately how much you’d have saved depending on how many years you let your money grow:
| Number of Years | Total Savings |
|---|---|
| 5 | $6,900 |
| 10 | $16,600 |
| 20 | $49,200 |
| 30 | $113,400 |
| 40 | $239,600 |
Source: Author’s calculations
Your money will grow exponentially when it has more time to compound. In this scenario, your total savings double roughly every decade. By starting to invest now and sticking with it over the long run, compound interest can do its job and help your money grow faster.
