Put time on your side.
A simple introduction to compound growth, with a small example that makes the idea click.
In this guide
Compounding means returns can generate further returns. It is a mechanism, not a promise.
What changes when you change the numbers?
Explore time, contributions, and two fee scenarios in an interactive illustration.
Try the growth & fee calculator ↗Growth can build on growth.
When returns stay invested, they become part of the amount that can earn future returns. That is compound growth. Time gives this process more opportunities to work. [1]
Make it concrete.
Imagine $1,000 earning exactly 5% per year, compounded annually. With no deposits or withdrawals, the second year begins with $1,050, so its 5% gain is $52.50. This is an illustration, not a forecast or a product offer.
| After | Illustrative balance | Growth that year |
|---|---|---|
| Year 1 | $1050.00 | $50.00 |
| Year 2 | $1102.50 | $52.50 |
| Year 3 | $1157.63 | $55.13 |
Real life is less tidy.
Investments can lose value. Returns vary, and fees, taxes, and inflation affect the outcome. A smooth mathematical example should never be mistaken for a predictable market journey.