Compounding not a 'get-rich-quick' scheme, IFA warns

Compounding ‘requires patience’, Continuum IFA says

Sahar Nazir
clock • 1 min read

Continuum IFA Ian O’Dowd has warned that compounding is not a “get-rich-quick scheme” as it requires patience and a long-term perspective to realise its full potential.

The firm has said that compounding involves generating earnings not only on initial investment each year, but also on the interest or returns from previous years. "This creates a snowball effect where your wealth grows exponentially over time," O'Dowd said. "To maximise its benefits, start early, and even small contributions can result in substantial growth." Furthermore, O'Dowd explained that reinvesting dividends, interest, and capital gains can help accelerate the compounding process and magnify returns. He also advised diversifying investments across various asset classes to mi...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Your profession

AJ Bell calls on govt to merge cash and stocks and shares ISAs

AJ Bell calls on govt to merge cash and stocks and shares ISAs

The merger would be the first step in achieving a single ‘One ISA' regime

Valeria Martinez
clock 15 July 2024 • 2 min read
Premier Miton confirms MPS launch timeline

Premier Miton confirms MPS launch timeline

Group also reported AUM up 8% since opening position

Jen Frost
clock 15 July 2024 • 2 min read
Advisers urged to keep client communications simple and intuitive

Advisers urged to keep client communications simple and intuitive

‘This becomes more important over time as their life changes’

Isabel Baxter
clock 15 July 2024 • 1 min read