Compound Growth
The only thing that beats time is starting.
Compound growth is not a trick. It is arithmetic. When your returns generate their own returns, the function is exponential, not linear. The problem is that exponential functions feel slow at the beginning, which is exactly when starting matters most.
How it works
Put in a starting amount, add to it each month at some annual return, and watch the portfolio split into two parts: what you contributed, and what the compounding added on top. Notice how the growth band overtakes your contributions the longer you stay invested. That crossover is compound growth becoming the dominant force.
Try it yourself
Move the sliders. The gold band is growth your money earned on its own, on top of what you put in.
Total contributed
S$410K
Growth on top
S$1.1M
Value at 30yr
S$1.5M
Waiting 5 years to start, with the same contributions and return, would leave you with S$484K less at year 30. Time is the one input you cannot add back.
| Year | Contributed | Value | Growth |
|---|---|---|---|
| 5 | S$110K | S$139K | +S$29K |
| 10 | S$170K | S$264K | +S$94K |
| 15 | S$230K | S$440K | +S$210K |
| 20 | S$290K | S$685K | +S$395K |
| 25 | S$350K | S$1.0M | +S$680K |
| 30 | S$410K | S$1.5M | +S$1.1M |
Illustrative only. Assumes a constant annual return compounded yearly; real returns vary and are not guaranteed.
The cost of waiting
Starting five years later, with identical contributions and returns, can cut your portfolio at the same end date by roughly a third. That gap is not recoverable through higher contributions without dramatically changing your lifestyle. The math is unforgiving because time is the variable you can only spend once. Move the years slider above to see the penalty for your own numbers.
What this means for your FI date
Every year you delay starting is an asymmetric loss: you lose the contribution, plus the compound growth it would have generated for every subsequent year. Conversely, every year you start earlier moves your FI date forward by more than one year. The leverage runs in both directions.