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...

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