Part 4/9:
Time is arguably the most critical factor in maximizing the benefits of compound interest. The earlier one begins investing, the more time their money has to grow exponentially.
Scenario Example:
A 25-year-old who invests $5,000 annually at an estimated 6% return will accumulate over $770,000 by age 65. If they delay starting by 10 years, the total drops by about half due to fewer compounding periods, resulting in roughly $380,000.
Moreover, starting early allows the invested amount—say, $50,000 more over the years—to generate substantially higher returns over decades, thanks to the effect of compounding. This phenomenon underscores that multiplying your invested amount earlier leads to disproportionately larger wealth accumulation.