Compound interest is earning returns on both your original investment and on previously earned returns, causing growth to accelerate over time.
Compound interest is the process of earning returns not just on your original investment, but also on the returns it has already generated. Over time, this creates a snowball effect.
The longer your money compounds, the more dramatic the growth, because each period builds on a larger base. This is why starting early is so powerful, even with modest amounts.
For example, reinvesting dividends or staking rewards rather than spending them lets those earnings generate their own earnings, accelerating wealth accumulation.
Albert Einstein is often quoted, perhaps apocryphally, calling compound interest the eighth wonder of the world. Whether or not he said it, the math is undeniable: time and consistency are an investor greatest allies.
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