Compound Interest: Why Starting Early Beats Investing More
A worked comparison showing how time in the market — not amount invested — dominates long-term returns.
Everyone who's read a personal-finance book has heard "start early." Here's a concrete example of why that's true.
The setup
Alice invests $200 per month from age 25 to 35 — 10 years, $24,000 total — then stops. Bob starts at 35 and invests $200 per month until age 65 — 30 years, $72,000 total.
Both earn 7% per year.
The result
At 65, Alice has about $283,000. Bob has about $244,000. Alice invested a third of what Bob did and still comes out ahead.
Why
Alice's contributions compounded for longer. Even though she stopped adding money at 35, the balance kept growing at 7% for another 30 years — which more than made up for Bob's larger deposits.
The lesson
Time in the market beats amount. If you can only invest a little, invest early. Use the Compound Interest Calculator to compare scenarios with your own numbers.