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INVESTING 101 · Lesson 15

Compounding, explained without the chart everyone uses

Daily Desk · Editorial5 min read
Compound interest is so simple it gets ignored, and so powerful it makes most other financial decisions look small.

Everyone has seen the chart. A flat line for the first twenty years, then a sudden upward curve like a hockey stick. The implication is that compounding is some magic that arrives late. It isn't. The math has been working the entire time — slowly, then steeply — because that's just how exponents look.

— Educational, not financial advice.