22 May 2025
The compounding effect: How it could boost or harm your finances
The compounding effect – essentially growth on growth that snowballs over time – can have an enormous impact on your finances. It can significantly increase the size of your savings and investments in the long term but, if not carefully managed and understood, it can also work against you. This handy guide clearly explains how compounding works, and provides examples of how it might boost or harm your financial circumstances.