Sallie Krawcheck is the CEO and co-founder of the female-focused digital-advice platform Ellevest. Before that she led Citibank and Merrill Lynch’s wealth-management businesses and served as CEO of Smith Barney and Sanford C. Bernstein. One important lesson that many fail to understand: It’s never too early to begin investing and to use the power of compounding:
“Say you invest $100 today and earn 10% on it in the coming year; that’s $10, which means you than have $110. If you earn that same 10% return the next year, you earn it on the $110. So you earn $11, not $10. Do it again, and the same 10% return earns you $12. And so on and so on. And over time, it adds up a lot.”
The lesson: Start early to make the most of compounding.
Sven Franssen