Compound interest is boring for ten years. Then it stops being.

Compound interest has a communication problem: it is always explained with the final figure, which impresses, and never with the path, which is where people fall off. And the path is long and flat. Whoever quits does not quit because they misunderstood the idea, they quit because for years they see nothing resembling what they were promised.

So let us start with the path. Two hundred a month, a 7% annual return, thirty years. The two lines on the chart are what you put in and what is there in total.

Year 19 is the one that matters: it is when what interest contributes overtakes what you contribute. Until then, this looks a lot like a piggy bank. From there on, it stops looking like one.

The end figures: you put in 72 thousand and there are 244 thousand. Of that total, 172 thousand were not put in by you. But look at where almost all of it happens: in the final third. The first ten years are the part to endure, not the part that convinces.

Why starting early beats contributing a lot

Here is the least obvious and most useful consequence. Compare two people. One starts today and sets aside two hundred a month for thirty years. The other takes five years to decide and, to make up for it, sets aside fifty per cent more: three hundred a month for twenty-five.

They end at 244 thousand and 243 thousand: for practical purposes, the same place. The difference is what it cost to get there. Five years’ head start is worth as much as contributing fifty per cent more every month for twenty-five years, and it comes out 18 thousand cheaper.

The variable that matters most at the start is not how much you set aside or what return you get. It is when you begin — and it is the only one of the three that cannot be recovered later.

Two corrections before you get excited

• That 7% is constant in the chart and is not constant in life. There will be twenty per cent years and minus thirty per cent years, and the average only shows up if you are still there when the second kind arrives. The curve describes the shape, not a schedule.
• And the final figures are in money from thirty years out, which buys less than today’s. With inflation stripped out, the number lands well below what it looks like. It is still worth it; it is just not the headline figure.

What to do with this today

1. 1Find your real savings rate: what share of what comes in you do not spend. It is the only number that matters in the early years, far above returns.
2. 2Automate the contribution on payday. Not at month end with what is left, because nothing is ever left — and this chart only works if the line has no gaps.
3. 3Before any of this, have the cushion in place. Without it, the first breakdown forces you to sell at the worst moment and break the curve right when it was starting to bend.

None of this is hard to understand. It is hard to sustain for nineteen years without a method telling you what order things go in and what to do in the year everything falls. That is the difference between knowing what compound interest is and living to see it.