
Why starting early matters
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- Compound interest is interest on interest. Instead of taking out what you earn each year, you leave it in, so next year's interest is worked out on a bigger total.
- Put ten thousand pounds in at seven percent and after one year you have ten thousand seven hundred.
- Leave it alone and the curve begins to bend. After ten years you have roughly nineteen thousand seven hundred: nearly double.
- After twenty years, about thirty-eight thousand seven hundred. After thirty, more than seventy-six thousand, from an initial ten thousand.
- Simple interest, paid out and spent each year, would have earned twenty-one thousand over the same thirty years.
- The difference is time. The steepest part of the curve comes last, so every year you wait to start is the most expensive year to lose.


