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Power of Compounding Using The 8-4-3 Rule (Compound Your Interest)Compounding is a powerful investing concept that involves earning returns on both your original investment and on returns you received previously. Compounding is the process in which an asset's earnings, from either capital gains or interest, are reinvested to generate additional earnings over time. Compound interest refers to the principle that when you save money, as well as earning interest on the savings, you also earn interest on the interest itself.