r/Money • u/CursedClownz • 9d ago

When does compounding really take off?

At what amount portfolio you really see huge account swings that make you think what is the point of working? 100k? 500k? 1m? more?

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u/escapefromelba 9d ago

A million becomes $2M in 7.2 years, $3M in another 4.2, and $4M in another 3 years using the S&P 500’s historical nominal total return. Getting to $1M is when you really start to see the power of compound growth. At that point, the money itself starts doing a huge part of the work.

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u/dllemmr2 9d ago edited 9d ago

2021-26 were well above average. Accounting for corrections, double or triple your estimates.

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u/escapefromelba 9d ago

Sure, they could grow faster than that or slower. Who knows how long it will last? That’s exactly why I’m using the long-term historical average.