The Power of Compounding: Why Starting Early Matters

Compounding is the eighth wonder of the world, the saying goes — and like most wonders, it is widely admired and rarely understood. The maths is simple: returns earn returns, and those returns earn returns in turn, snowballing over time.

The ten-year head start

Consider two investors. The first invests ₹10,000 a month from age 25 to 35 — ten years — then stops and simply lets the corpus ride. The second starts at 35 and invests the same ₹10,000 a month every month until 60. At a 10% annual return, the early starter ends up with more money, despite contributing for only a third as many years.

Time does the heavy lifting in compounding. Your job is simply to start, and then to stay invested.

What it means for you

The cost of delay is permanent. Every year you wait is a year of compounding you can never buy back. The best portfolio is the one you start today — even if it is small — because small and early beats large and late.