Time changes the exponent.
Starting earlier adds entire rounds in which yesterday’s growth can itself produce growth.
GROWTH ON TOP OF GROWTH
Compounding
bends time.
At first, your contributions do the work. Later, the returns on earlier returns can become the larger force.
01
THE TIME MACHINE
Change the curve.
ENDING VALUE$0
YOU PUT IN$0
GROWTH$0
ContributionsGrowth
Hypothetical illustration with smooth monthly compounding. Markets do not return a fixed rate, and this omits volatility, taxes, fees, account rules, and sequence-of-returns risk.
02
THE CROSSOVER
When does growth do more?
Year 19
Projected growth becomes larger than every dollar contributed.
Time is now adding more to the balance than the saver did.
Contributions own the beginning.
In early years, savings behavior matters more than small differences in return assumptions.
Costs compound backward.
A recurring fee or persistent inflation also acts every year, reducing the amount that gets another turn.
03
UNDER THE HOOD
A loop, not magic.
1Start with a balance
→
2Add a return
→
3Keep the growth
↻
Next period, the starting balance includes the last period’s growth. Repeat.
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