Charles Schwab, a financial expert, has published a breakdown of how compounding can be a powerful force in investing. The study compared hypothetical investors who each start with $10,000 on the same day and hold for 30 years, with one reinvests earnings each year and the other withdraws them to cover short-term expenses. The analysis found that the reinvesting investor earned $66,123 from the same starting amount over three decades, more than three times what the withdrawing investor earned. This difference can be seen in retirement balance and monthly cash flow. Schwab also highlighted the importance of combining compounding with consistent annual contributions to grow wealth. The company identifies 3 steps to apply compounding to your investment portfolio, which can take 3 steps a day.