How Compound Interest Builds Your Future

If there’s one financial concept you should lock in right now, it’s this: Compound interest is the ultimate cheat code for wealth. You don’t have to be a genius, a millionaire, or even lucky—you just need to start early, stay consistent, and let time do its thing.

What Is Compound Interest?

Compound interest is when your money earns interest… and then your interest earns interest… and then that interest earns interest… and it just keeps going.

In simple terms: You’re making money on your money—and on the money your money made.

It’s how small, boring investments turn into big, exciting results over time.

Why Compound Interest Is a Big Deal

Let’s say you invest $100 and earn 5% a year:

• After 1 year: $105
• After 2 years: $110.25 (not just $110—because you earn interest on the $105!)
• After 10 years: $162.89
• After 30 years: $432.19

The longer you leave your money invested, the harder it works for you. Time is your secret weapon.

Meet Ben and Arthur: The Ultimate Compound Interest Story

Here’s a true classic in personal finance education:

Ben started investing at age 19. He put away $2,000 per year for just 8 years, then stopped.
Total invested: $16,000.

Arthur didn’t start investing until age 27. He also put away $2,000 per year, but he kept going all the way until age 65.
Total invested: $78,000.

Guess who ended up with more money at age 65?

Ben—the guy who invested early and then stopped!

Even though Arthur invested almost five times as much, Ben’s early start gave him the power of compound interest. His money had decades to grow.

Name	Start Age	Years Contributing	Total Invested	Value at 65 (Assuming 8% annual return)
Ben	19	8	$16,000	approx. $2,288,996
Arthur	27	38	$78,000	approx. $1,532,166

What This Means for You

Starting early isn’t about having lots of money—it’s about giving small amounts of money more time to grow.

The earlier you start:

• The less money you need to invest overall
• The bigger your potential future wealth
• The more options you’ll have later in life

The Real Power Move

Building wealth isn’t about luck. It’s about patience + time + consistency.

Using MyPowerPlay Personal Finance Simulations, you’ll see how your financial choices impact your net worth over time. You’ll watch compound interest in action—and understand why starting early gives you a massive head start on your future.