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Compound Growth

📖 Read: Compound Interest — The 8th Wonder →

The 8th wonder of the world. Drag the sliders and watch your wealth build.

Initial investment$10k
Monthly contribution$500
Annual return8%
Time horizon30 yrs
Final value
Contributed
Interest earned
Contributions came from compound interest
With compounding
Contributions only
No contributions (lump sum only)
Rule of 72 insight

Related

📖 How compound growth works Tap to expand

Compound growth means earning returns on your returns — not just on what you originally invested. A small amount invested for a long time can grow into something extraordinary because the growth accelerates over time.

Example: $10,000 invested at 7% per year grows to $19,672 in 10 years. But wait another 20 years (30 years total) and it's $76,123 — without adding another cent. The growth in the final decade dwarfs the first two decades combined.

This is why time in the market matters more than almost anything else. Starting 10 years earlier can be worth more than doubling your contributions.

The calculator shows three lines: your contributions (what you actually put in), your investment returns (the compounding effect), and the total portfolio value. The gap between contributions and total value is money created by compound growth.

Not sure what annual return to use? A diversified global share ETF has returned approximately 7–9% per year over the long run after inflation. Conservative estimates use 6–7%.

Glossary: Compound Interest · Full guide: Compound Interest

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How compound growth works

Compound growth is the single most powerful force in personal finance. It means your investment returns earn their own returns, creating exponential growth over time. Albert Einstein reportedly called it the eighth wonder of the world — and whether or not he actually said that, the math speaks for itself.

The key insight: time matters more than amount. Someone who invests $500/month starting at age 25 will have more at 65 than someone who invests $1,000/month starting at 35, assuming the same returns. The extra decade of compounding outweighs the double contribution. This is why starting early, even with small amounts, beats waiting until you can afford larger investments.

This calculator lets you model different scenarios: adjust your starting amount, monthly contributions, return rate, and time horizon, and watch the compound growth curve bend upward on the chart.

Frequently asked questions
What is the rule of 72?
The rule of 72 is a shortcut: divide 72 by your annual return rate to estimate how many years it takes to double your money. At 7% returns, your money doubles roughly every 10.3 years. At 10%, every 7.2 years.
How much should I invest each month?
Any amount is better than zero, and starting is more important than the amount. A common guideline is to invest 15–20% of your gross income. The FIRE community often targets 50%+ savings rates to reach financial independence faster.
What return rate should I assume?
A globally diversified share portfolio has historically returned approximately 7–10% per year before inflation (5–7% after inflation). This calculator lets you model different rates to see how sensitive your outcome is to the assumption.