Chances are, you’ve heard someone mention the term compound interest, at some point. But do you know exactly what it is and how it can benefit your investments? And just as important, do you know where to find the best compound interest investments?

Whether you are an active investor or an aspiring one, it’s crucial that you understand how compounding works. In my estimation, compound interest is critical to successful investing.

In this article, I’ll explain compound interest, how it works, and how you can use compounding to your advantage in your portfolio.

What Is Compound Interest? 

Compound interest is earning interest on the interest you’ve already made.

Imagine a rolling snowball. A small snowball – representing your initial investment – gradually becomes larger as it rolls forward and adds more snow to what’s already stuck to the snowball. The more snow (interest) the snowball (your initial

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Goldman Sachs (GS) CEO David Solomon expects the stock market’s slide to continue in 2023 and think the odds of a recession hitting the US economy are about 2-out-of-3.

Speaking at the Wall Street Journal’s CEO Council Summit on Tuesday, Solomon said he expects stocks will be lower, along with oil and real estate (both commercial and residential), while the US dollar is poised to rise slightly next year.

Meanwhile, Solomon placed the probability of a “soft landing” — or a slowdown in inflation that doesn’t tip the economy into recession — for the US economy at only 35%.

“I would define a soft landing as we get inflation back close to 4% inflation, maybe we have a 5% terminal rate and we have 1% growth,” Solomon said. “I think there’s a reasonable possibility we could navigate a scenario like that.”

“But I also think there’s a very reasonable possibility

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In its latest submission to the Australian Law Reform Commission’s (ALRC) Review of the Legislative Framework for Corporations and Financial Services Regulation, the Financial Planning Association of Australia (FPA) has suggested financial advice regulations are prioritised for transitioning to the ALRC’s proposed structure of the legal requirements based on thematic rulebooks.

The ALRC package of proposals aims to improve navigability of the law and remove duplication under a new legal hierarchy of:

  • Principles-based legislation
  • Scoping order – consolidated exclusions and exemptions; and
  • Thematic rulebooks.

FPA Chief Executive Officer, Sarah Abood, says: “The proposal is in line with FPA’s long-held position that the legal obligations placed on individual financial planning practitioners should be separated from the requirements that apply to AFS licensees and product providers.

“The ongoing dialogue between the ALRC, the FPA and the financial services sector more broadly, continues to be a constructive demonstration of

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1. If your income is higher in 2022, defer your bonus into 2023

If you’ve had a strong year and expect lower earnings in 2023, you may try to defer a holiday bonus until the new year, experts say.

“It’s always exciting to reap the rewards of hard work by getting a year-end bonus,” said Lisa Greene-Lewis, a CPA and tax expert with TurboTax. “But sometimes that may bump you up into another tax brackets.”

However, by receiving the money in January, you may reduce 2022 income without waiting too long for the funds, assuming your company allows it, she said.

2. Prepay future medical expenses for a deduction

It’s not easy to claim medical expense deductions. For 2022, there’s a tax break for unreimbursed medical expenses that exceed 7.5% of your adjusted gross income. But can only claim it if you itemize deductions.

Typically,

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