Wealth Building

Compounding

Reinvestment of returns to generate returns on prior returns.

Reviewed 9 August 2026 by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Plain-English explanation

The single most powerful wealth force — works through equity, cash flow, and refis.

Examples

10% compounded over 25 years = 10.8x original capital.

Common mistakes

Pulling capital out for consumption before compounding compounds.

Compounding

Plain-English explanation

Examples

Common mistakes

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