The Power of Compounding Starts Slow
Compounding looks very slow in the early years. Many people cannot feel its power at the start. When money grows at an average return of around 7% per year after tax, the first part of the journey takes a long time.
To reach the first 10% of a big goal, like the first 100,000 dollars out of one million, it can take almost eight years. During this time, growth feels boring and small.
Growth Becomes Faster With Time
After crossing the first level, things slowly start to change. The next 100,000 takes less time. Then it becomes even faster. Five years, then less than four years, then three years, then two and a half, then two years. The last 10% of the total wealth comes very fast, in just about 1.3 years. This is how compounding works. Time does the real magic.
Most Wealth Is Created Near the End
Around 80% of total wealth is created in just 57% of the total time. This clearly shows a simple rule of life. A small part of time creates most of the result. In the remaining long time, wealth grows very slowly. This is why many people feel nothing is happening and lose patience too early.
Why Many People Quit Too Early
Most people stop investing after two or three years. They feel nothing has changed and think investing does not work. Some even say equity or long-term investing is useless. They do not see that they have already completed the hardest part. The real fast growth comes only after staying invested for many years.
Compounding Works for Everyone
You do not need special skills to enjoy compounding. Even simple index investing with average returns of 10 to 12% can create a strong growth curve. This fast rise is not luck. It is simple math. Anyone who starts early and stays invested for many years gets the biggest benefit when compounding becomes very fast in later years.
Start Early and Stay on the Path
The biggest advantage goes to those who start early and do not quit. The longer you stay invested, the more you benefit when growth speeds up. Compounding rewards patience more than anything else. Stay calm, stay invested, and let time do its work.
