If you start early enough, compounding returns can lead to a significantly earlier retirement. How It Works For example, assume that you put $5,000 aside in a note that’s 12 months gaining a 12% return. At the end of that 12 month period, you will make $600. Instead of paying out that dividend, now invests $5,600 aside in another note yielding 12%. Now you’ve made $672 in addition to the $600 you made just a year ago.   Savings: $5,000 Interest Rate: 12.00%     Year 1   Year 5  Year 10  Year 15   Year 20 Capital Gains (Yr 20) COMPOUNDED $ 5,600.00 $ 8,811.71 $ 15,529.24 $ 27,367.83 $ 48,231.47 $43,231.47 PAID OUT DIVIDENDS $5,600.00 $5,600.00 $5,600.00 $5,600.00 $5,600.00 $12,000.00   Benefits of Compounded Interest It’s powerful seeing the difference of compounded interest versus re-investing your initial investment. Moreover, the two options illustrated above are small samples of what you can accomplish. […]