"One RA means a larger pool of funds to compound as opposed to splitting the funds..."
Myth. I want to shout this out at the top of my lungs. "Myyyyyth". This is a common misconception. The idea is that you keep all your funds in one big pool as the compounding effects will be larger in this big bool vs two smaller pools of funds. Let's test this idea using the "big pool vs smaller pools test".
The big pool vs smaller pools test. Given
- BIG POOL: you have a big pool of assets worth R100 000
- SMALLER POOLS: two smaller pools worth R50 000 each.
Will the big pool be worth more after a few years due to compounding effects being larger? To make this