Guides

Short guides to the ideas behind compounding. Each one takes a few minutes to read.

• How Compound Interest WorksA plain English guide to compound interest. What it is, why it snowballs, and how to make it work for you.
• The Compound Interest Formula ExplainedEach part of the compound interest formula explained with a worked example. Includes the version with regular deposits.
• Why Investment Fees Matter So MuchHow a 1% fee can take a quarter of your retirement savings, and how to avoid it.
• Compounding in Reverse: How Debt GrowsThe same math that grows savings grows debt. How interest on loans and credit cards works against you, and how to beat it.
• Time in the Market Beats Timing the MarketWhy staying invested through ups and downs beats trying to guess them, with the numbers to back it up.
• The Cost of Waiting to InvestWhat delaying by five or ten years does to your final result, and why starting small beats starting later.
• What Return Should You Expect?Realistic long run returns for stocks, bonds and cash, and the number to use in your own planning.
• The Rule of 72 ExplainedHow to estimate doubling time in your head, where the rule comes from, and when it stops working.