Compound Interest, Explained with $100 a Month

What if saving just $100 a month could make you a millionaire's neighbor? The secret is compound interest. You earn interest on your deposit. Then next year, you earn interest on the interest too. Money starts earning money. After 1 year of saving $100 a month, you put in $1200. At 7 percent return, you have about 1240 dollars. After 10 years, you deposited $12,000, yet your balance is about 17,300 dollars. Interest already added thousands. Now wait 30 years. You deposited only $36,000, but the balance reaches about 122,000 dollars. Look at the jump. The growth speeds up, because time lets interest pile on top of interest. So start early, stay consistent, and be patient. Time is the real engine behind your money.