Compound Growth: Why Starting Early Matters More Than Starting Big
October 8, 2026 · Investing
Compound growth is what happens when the returns on your investment start earning returns of their own. Once you see it in action, it’s easy to understand why time is one of the most powerful tools an investor has.
How compounding works
Imagine you invest R10,000 and it grows by 10% in a year. You now have R11,000. If it grows by 10% again the next year, you earn R1,100, not R1,000, because you’re earning growth on your original money and on last year’s growth. After two years you have R12,100. Over decades, that snowball effect becomes powerful.
An example: Thandi and Sipho
Thandi and Sipho both want to retire at 65. To keep things simple, we’ll assume both earn an average return of 10% a year.
- Thandi starts at 25. She invests R1,000 a month for ten years, then stops adding money at 35 and leaves her investment to grow. In total, she puts in R120,000.
- Sipho starts at 35. He invests R1,000 a month for 30 years, all the way to 65. In total, he puts in R360,000, three times as much as Thandi.
At 65, Thandi’s investment is worth about R4.1 million. Sipho’s is worth about R2.3 million.
Thandi contributed far less but ended up with much more, simply because her money had ten extra years to compound.
These figures are illustrations only, assuming monthly contributions and a constant 10% annual return before fees, tax and inflation. Real returns vary from year to year and are not guaranteed.
What this means for you
- Start as early as you can, even if the amount feels small. Time does a lot of the heavy lifting.
- Be consistent. Regular contributions, made automatically, add up.
- Give it time. Withdrawing early interrupts the snowball.
- Watch your costs. Fees compound too, against you, so lower-cost investments leave more of your returns working for you.
- Think in real terms. What matters is growth above inflation, which is why long-term goals usually need growth assets.
If you didn’t start at 25, don’t be discouraged. The second-best time to start is today.
Please note: This article is for general educational purposes only and isn’t financial advice. Consider speaking to an authorised financial services provider about your personal situation.