But what's the power of 'double compounding'? Well, you can also call it 'compound interest on steroids'. This is when a stock compounds your money every year (like you saw in the above chart), and it also gives you a constant stream of dividends that you can reinvest to again compound your money. Such stocks are able to generate greater long-term returns than other stocks, or any other similar investment. So in the above example, if we add a stock that: 1. Rises 10 percent every year for 25 years, 2. Pays consistent dividend of, say, Rs 50 per share every year, and 3. These dividends are reinvested to earn 10% compound interest every year 1,000 invested now would be worth around Rs 15,700 at the end of 25 years, or even higher than the return from a stock that only rises 10% every year and doesn't pay any dividend.