See how your money grows over time. Even small monthly investments can become a fortune with compound returns.
Compound interest is interest calculated on both the initial principal and the accumulated interest from previous periods. In simple terms, you earn interest on your interest. This creates a snowball effect where your money grows exponentially over time rather than linearly.
Starting 10 years earlier has a dramatic effect. Someone investing €300/month from age 25 to 65 at 7% would accumulate approximately €745,000. Starting at 35 instead yields only about €340,000 — less than half. The extra 10 years of compounding nearly doubles the result, even though the additional contributions are only €36,000.
The long-term average annual return of a globally diversified stock portfolio (like an MSCI World ETF) has been approximately 7-10% before inflation and 5-7% after inflation. Past performance doesn't guarantee future results, but these historical averages are commonly used for long-term financial planning.