Investing · 3 min read
The Power of Compounding
Compounding is earning returns on your returns — the single most powerful force in long-term investing.
Why it matters
The earlier you start, the more time compounding has to work.
Advantages
- Exponential growth over time
- Rewards patience
- Passive wealth building
Risks
- Fees compound against you too
- Requires discipline to not interrupt
Real-world example
₹10,000/month at 12% CAGR is ₹35L in 10 years, ₹1cr in 20, ₹3.5cr in 30 — the last decade adds the most.
Key takeaways
- Start early, even small amounts
- Minimize fees and taxes
- Never break long-term compounding without cause
Quick quiz
1. Which factor most amplifies compounding?