The maths of compounding is simple, but its effect is hard to feel. In the early years, almost all of your balance is money you put in. After a decade, returns on earlier returns begin to outpace new deposits.
What it means for your portfolio
The practical lesson is that time and consistency beat timing. Raising a deposit by $100 a month early on often does more than chasing an extra percentage point of return later.
None of this is a forecast, and past performance does not predict future results. Fees, taxes and time horizon matter at least as much as the product itself, and a plan you can stick with through a bad year usually beats a clever one you abandon.
A $400 monthly deposit at a 6% annual return grows to roughly $185,000 in 20 years, and more than half of that is growth, not contributions.
The risks to weigh
This article is for information only and is not investment advice. Figures are illustrative and may be delayed or simulated for demonstration purposes.
This article is for information only and is not investment advice.
