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Author: happyclouds One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76421  
Subject: Is compound interest working? Date: 5/12/2010 12:06 PM
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I started putting teeny bits of money into a roth IRA when I was 20, but I didn't really start loading it up till I was about 25 or 26 at which point I also bought some stocks in a brokerage account. But now several years later (I'm 28), I'm not so sure compound interest is working. How can I tell if it is?

Here are some examples:

I bought JNJ in 2007 at 60.33. The MF scorecard says my return is 7.4%. Does that mean my annual return over 4 years has been around 1.84%?

My brokerage account is around 18K and is up $1200. How can I tell if that is good?

Or to give a different example, my roth IRA is currently almost 20K and has gone up 2100 "since purchase" according to my fidelity account. How do I make sense of these numbers?

I've read things about compound interest and it always says time is on your side and yadda yadda yadda if you have 12% return. Well, I'm guessing I've had nowhere near that high of a return, but I'm not sure how to begin to calculate if I am on track to building some real wealth down the line.

I need to keep some notations to keep track of returns but i'm not sure where to begin.

Thanks.
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