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Anonymous
If say I put $1000 in each stashaway, syfe (reits) and sti etf. Scenario 1 is that I stopped investing and left it for many many years. Scenario 2 is that I constantly put in money either by batches or monthly. How does compounding interest work in this scenario?
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Hariz Arthur Maloy
20 Mar 2020
Independent Financial Advisor at Promiseland Independent
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There's no compound interest in equity investments because they don't pay any interest.
Only tools that pay interest, compounds. Like bank accounts, loans, insurance cash bonuses.
Equity investments have growth and dividends. And if you reinvest dividends you can consider that compounded growth, but that's not interest.
With equity investments, you buy low and sell high. And regular investments allow you to accumulate units or shares.