“The real cost of a four-dollar-a-day coffee habit over 20 years is $51,833.79. That's the power of the Compound Effect,” quoted Darren Hardy in The Compound Effect.

Anyone who's heard about investing has probably heard about compounding. But what does it really mean? Compounding simply means earning interest on the interest earned. It is essentially reinvesting the earnings you get from your initial invested amount instead of spending it elsewhere. If you let your money remain invested for a long period of time and keep adding to your investments, a large corpus gets built.