The 8th Wonder: Compounding
Time in the market beats timing the market.
Compounding is interest earning interest. $500/month at 8% annual return becomes:
- 10 years → $91,473
- 20 years → $294,510
- 30 years → $745,179
- 40 years → $1,745,503
The last decade does most of the work. Starting at 25 vs 35 can mean an extra million dollars at retirement, with the same contributions.