Simple growth vs compound growth
Simple growth: you put $100 in and earn 10% — you now have $110. Next year you earn another 10% on the same $100, ending at $120.
Compound growth: that same $100 earns 10%, becomes $110, and the following year earns 10% on $110, ending at $121. Year three you earn on $121. The gains start earning gains. Over decades, the difference is enormous.
A real example
$100 invested at age 20 with average market returns (~8% per year) becomes about $2,170 by age 60. The same $100 invested at age 40 only becomes around $466 by age 60.
The lesson: time matters more than the amount. Starting small early beats starting big late.
Why most people miss out
Compounding feels invisible at first. Year one looks boring. Year five looks fine. Year twenty looks magical. Most people quit before the magic kicks in.
The fix is automation: invest a small amount on a regular schedule, then leave it alone for years.
Practising the patience
CitizenInvestor's simulator lets you fast-forward and visualise how compounding plays out, so you can see the curve before you live it. Then a small monthly habit in real life becomes much easier to stick with.