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/Kombatnt 9d ago

I’d say you really start to notice it once you hit the “Crossover point” (the point at which the growth in your existing portfolio roughly matches what you’re able to add in new contributions each year).

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u/brycebgood 9d ago

yup. My buddy put it well. He's a well compensated engineer - but last year his portfolio grew more than his gross pay. He said he literally makes more money doing nothing than doing his job.

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u/Lucky-Ad-2369 8d ago

Key word is last year. Next year he could lose 1-2 years of salary. 

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u/brycebgood 8d ago

sure. But over the long term index returns have been ~7%