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Small Investments May Add-Up Over Time
When investing, rule number one: its time not timing!
Putting time on your side may be your biggest ally when investing for longer-term goals thanks to the power of compounding. Compounding occurs when investments and potential investment earnings accrue over time. Simply put, your account may have the opportunity to generate more earnings based on the growing balance.
Let’s see how compounding works:
Investor 1: Invests $250 every month for 10 years. His total investment is $30,000 however; his total investment value has grown $45,321 thanks to compounding and accruing.
Investor 2: Invests $250 every month for 20 years. His total investment is $60,000. However, his total investment value has grown to $143,165. That’s more than double his actual investment amount!
Investor 3: Invests $250 every month for 30 years. His total investment is $90,000. However his total investment value has grown to $354,403 - an increase of more than 293%!
Past performance is no guarantee of future results. This chart is for illustrative purposes only and does not represent the performance of any specific Cavanal Hill Fund. Values are hypothetical in nature and do not take into account sales charges, fees, taxes or capital gains typically associated with mutual fund investing.
This chart assumes an investment of $100, $250 or $500 at the first of each month (annual investment of $1,200 $3,000 or $6,000) and an 8% annualized return for a 5-, 10-, 15-, 20-, 25- and 30-year period.
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