Time Value of Money: Compound Interest Explained (Start Early, Stay Invested) | West Oak Money

Описание: Albert Einstein (allegedly) called compound interest the “eighth wonder.” Whether or not he said it, the math is real: start early, keep contributing, and let time do the heavy lifting.

What you’ll learn

Snowball effect: Start young & contributions + time = exponential growth later in life.

Three levers you control:

Time (start now), 2) Contributions (automate), 3) Asset allocation (risk that fits your horizon).

Time in - timing: You can’t predict markets. Staying invested and dollar-cost averaging matter more.

Where compounding shows up: 401(k), IRA/Roth IRA, 529 (college), HSA—use the right accounts for your goals.

Friction to avoid: Idle cash beyond your emergency fund, high fees/excess trading, and lifestyle creep.

Raise rule of thumb: Consider routing ~50% of every raise to savings/investing to accelerate compounding.

Next steps
• Set up auto-contributions today (even $25–$50/mo).
• Review allocation and keep enough emergency fund—invest the rest.
• Lower fees (prefer broad, low-cost index funds).
• Commit to DCA (buy during downturns too).
• When you get a raise, earmark ~50% to savings/investing.

About West Oak Money
Money in plain English for real families—simple frameworks, checklists, and habits that compound.

Disclaimer
Educational only—not financial, tax, or legal advice. Investing involves risk. Consider your circumstances and consult a professional.