Small Investments Big Profits - Power of Compounding

It is said that Warren Buffett once picked up a penny he found in an elevator and said to the astonished onlookers "The beginning of the next billion!" What $1 becomes over 50 years. Click on the image to see a larger version



To illustrate the power of compounding further...

let's say you are saving for a specific goal such as child's education by depositing Rs.10,000 every year in a bank or a savings instrument which is paying 5% compounded annually. At the end of 20 years it becomes Rs.347,193. However in the hands of some one like Warren Buffett who is able to reinvest the amount at a rate of 23% compounded annually you would have a nest egg of Rs.33,06,059 at the end of 20 years .

Time and the 'magic of compounding' can generate astounding amounts of wealth for you and your family.