Stock market glossary
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Compound interest
Compound interest is the effect whereby reinvested gains in turn generate further gains: capital grows faster and faster.
At 7% a year, €10,000 becomes about €19,700 after 10 years and about €76,000 after 30, because each year you also earn on the gains of previous years. That's why time is one of an investor's most important allies, and starting early makes a big difference.
💡 The same mechanism works in reverse with costs: even a small annual fee, added up over many years, weighs heavily on the final result.
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