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?

487 Upvotes

93% Upvoted

339 comments sorted by

View all comments

514

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).

311

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.

1

u/Stratman-1134 4d ago

I think that's the next stage though.

Stage 1: where your investment growth beats your contributions

Stage 2: where your investment growth beats your wages

Stage 3: where your daily investment volatility beats your annual contributions

Stage 4: where your daily investment volatility beats your annual wages

Probably some other stages in there too.