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Wealth Builder

Einstein called it the Eighth Wonder of the World.

Compound Interest is the process where the interest you earn on your investment earns even more interest. It creates a snowball effect that grows exponentially over time. The Wealth Builder tool is designed to show you this mathematical magic in action.

A = P(1 + r/n)^(nt)

Time vs. Money

Time is more important than the amount of money you invest. Consider two investors: Sarah starts early (age 25) with smaller amounts, Mike starts late (age 35) with larger amounts. Sarah usually wins. This is because her money has had 10 extra years to compound. This tool helps you visualize the cost of waiting.

The Variables of Wealth

There are three levers you can pull to build wealth:

  • Principal: How much you start with.
  • Contribution: How much you add monthly/yearly.
  • Rate of Return: How well your investments perform.

You cannot fully control the market (Rate of Return), but you can control your Principal and Contributions. Use this calculator to see how small increases in your monthly savings can drastically change your retirement date.