Gains on then Gains

The real magic is “time in the market” and the effects of compounding, or the “gains upon the gains”, during full investment. The well-known formula shown below should be your guiding principle, not the random news of the day.

%Gain = 100 x (1+i)^n

where i is the “interest rate” (or growth) of your investment over a certain period and n is the cumulative time invested.

The chart below shows the true magic of compounding over a 30-year period with three different “interest rates”. One can see that the effects are more pronounced in later years.


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