Compound interest
What it is: returns earning returns. The growth is exponential, and human intuition is linear, which is why the result always looks surprising.
The thing to internalise: the curve is nearly flat for years and then bends sharply. Most of the final balance arrives in the last third. People quit during the flat part, having concluded it does not work.
What actually drives it:
• Time — by far the largest factor
• Rate — matters, but less than people think
• Amount — matters least of the three
The corollary: it works identically against you. Credit card debt at 22% is this same curve, pointed the other way.
Chart: identical contributions, one started ten years earlier. The gap is not ten years of contributions — it is far larger.