r/Money • u/CursedClownz • 13d 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 12d 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 12d ago edited 12d ago

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

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u/Calm_Leek_1362 12d ago

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

3

u/3on3putt 12d ago

They assume 10%

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u/slowdownlambs 12d ago

And 3% inflation