What compound interest actually does

Compound interest is just interest earning interest. You put money in, it grows a little, and next time around the growth is calculated on the bigger number - including last round's growth. Repeat that for years and the line stops looking straight and starts curving upward.

That curve is the whole reason saving early beats saving more later. It is also the reason it feels like nothing is happening at first: the early years are flat and unglamorous. The payoff is back-loaded.

Imagine €100 that grows 7% a year. After year one you have €107. After year two you do not have €114 - you have €114.49, because that extra 7% was charged on €107, not €100. The gap looks trivial. Over thirty years it is the difference between a flat line and a hockey stick.

The calculator on the home page draws exactly this. Drag the time slider out and watch the growth line pull away from the cash line. The space between them is compounding doing its quiet work.

Because the growth compounds, the years at the start are the most valuable ones - they have the longest runway to multiply. A smaller amount started earlier often ends up ahead of a larger amount started later.

This is good news if you feel behind: the lever you control most is not how clever your investments are, it is how early and how consistently you start.