Compound Interest

Compound interest is interest earning interest. You earn returns not just on your original money, but on every bit of return stacked up so far — which is why money grows slowly at first, then shockingly fast. It's the closest thing finance has to a free lunch, and time is its main ingredient.

Example: $10,000 growing at 7% becomes about $38,700 in 20 years without adding another dime — nearly four times your money.