Magic of compounding: Does it actually work? Let’s find out!

Yet another article on the magic of compounding. Negative compounding primarily works when you borrow money for discretionary expenses to buy things you do not need in the first place. There are three essential ingredients that you must focus on when you are planning to use compounding in your favour. The best example to explain the magic of compounding is the public provident fund and employees’ provident fund. If you contribute Rs 1.5 lakhs in Public Provident Fund, every year, at the beginning of each year for the first 15 years and let the money sit there for the next 15 years, the balance at the end of 30 years would be approximately Rs 1.13 crores.