The tragic thing about compound interest or capital compounding is that most people won't actually get to experience it. Even those of us who are good at delaying gratification (saving before we spend, rather than spending before we repay our loans) are still...
...saving or investing with the intent to spend.Compounding only truly kicks in when you've got a lot of money, and when you're not constantly drawing from it.
Think in really simple terms: half a million Rand, 10% of that is R50,000; a million Rand, 10% of that is R100,000. It's *the same 10%*, the same merit, the same skill, the same performance—but it's twice as much money.
Why? Because you started with twice as much.
In reality, at the beginning, most of us have hardly anything to invest, so it's barely growing. Later, when we actually have money, we're often spending it, so we're continuously interrupting our capital's growth.
Very few people reach that point of soaring, where you're spending so little of your capital that it can compound properly.
That's when the magic kicks in.
Maybe the real answer is planting trees for the next generation.