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Never Assume: Compound Interest Really is Magic

Updated: Apr 24



Our co-founder Oleg Shiller discusses another “a-ha!” moment he shared with a client, regarding compound interest.

 

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I’ve come to learn that many people don’t fully understand how compound interest works, and the magic behind it.

 

When the interest you earn on savings begins to earn interest on itself, it grows more rapidly and accumulates at an exponential pace.

 

I’ve spoken about it at length to clients and friends alike, and the reaction is usually the same: something along the lines of “That’s amazing!”.

 

However, I’ve observed that, for some, the true power of compound interest - and its effectiveness at generating greater ROI – hasn’t sunk in.

 

One of our existing investors, who receives passive monthly returns through a TFSA, reached out to me recently regarding this phenomenon.

 

They decided to run the numbers using online calculators, and they didn’t realize just how much it generated.

 

Now that the figures are right there in front of them, they’re able to envision a significant amount for their retirement.


The way I see it, the more I can educate current and prospective clients on the purpose and the power of compound interest, the more I can help them improve their financial position.

 

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To learn more about how compound interest can be a critical component of your investment strategy with OZ Capital, please book a call with us.

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