At 25 years, a stack of zero coins. At 35 years, a stack of 5 coins. At 40 years, a stack of 37 coins.

Compounding is a powerhouse tool when it comes to building wealth. When you put money into an investment account, you earn a varied rate of return on the balance. If you leave your money in the account, it can grow. An RCB Bank wealth advisor can help you plan a savings strategy built for your individual lifestyle goals and needs.

Example #1: College Savings

The Jones and Smith families each have a baby and start saving $150 per month for their child’s college education. The Smith’s use an investment account to build more wealth.

With no annual return, the Jones' had $10,800 after six years, $21,600 after twelve years, and $32,400 after eighteen years with a kid going off to college. With a 6% annual return, the Smiths had $12,960 after six years, $31,344 after twelve years, and $57,422 after eighteen years with a kid going off to college.

Example #2: Retirement Savings

Kyle Jones and Kelly Smith put $400 per month into their retirement accounts and earn the same rate of return. Kelly started saving at age 25 while Kyle waited until he was 35 to start.

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When it comes to investing, there are risks. Consult a financial advisor before beginning any investment plan. Opinions expressed above are the personal opinions of the author and meant for generic illustration purposes only. The monthly interest calculation expressed above is not for any specific account type and is meant for generic illustration purposes only. Investment products are not insured by the FDIC. Not a deposit or other obligation of, or guaranteed by the depository institution. Subject to investment risks, including possible loss of the principal amount invested. Wealth advisors do not provide tax, legal or accounting advice. Seek advice of professional tax consultant.