Compound Costs

The reason that a #smart #investor can build long-term wealth is largely due to the miracle of compound interest: even modest returns can, over time, produce an impressive nestegg down the road. The self-reinforcing dynamic of compound interest is the basic building block of any sound investment strategy. But working against that strategy, and eating away at that building block, is the phenomenon of what we might call compound cost. Most of those bites are so small that you won’t feel them individually. Even taken together, they may not feel too devastating in any given year. But cumulatively, and over time, those #costs will leave you with a much small #nestegg in the end.

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