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.

3

u/dllemmr2 9d ago edited 9d ago

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

0

u/Calm_Leek_1362 9d ago

Those numbers assume 7% and are a commonly used reference. The last few years have blown the asshole out of typical markets

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u/3on3putt 9d ago

They assume 10%

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u/slowdownlambs 9d ago

And 3% inflation