GLOSSARY TERM
Reinvestment
Reinvestment means putting dividends, interest or other cash payouts back into investments instead of spending them.
What does this mean in practice?
When income is reinvested, it stays in the market and can begin generating returns of its own. This keeps your money working and supports long-term growth. Reinvestment can happen automatically inside some funds, or manually if cash is paid out to your account and you invest it again yourself.
Example
A fund pays you €50 in dividends, and instead of spending that money, you use it to buy more units of the same fund. Over time, those extra units can also generate returns.
Why it matters
Reinvestment supports compounding, which is one of the most important drivers of long-term wealth building. It helps turn small cash payouts today into larger growth over time.
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