What is the power of compounding?

Compounding means earning returns not only on your original money but also on the returns you have already earned. Over time, your money grows faster and faster.

For example, if you invest ₹1 lakh and it grows at 10 percent a year, it becomes about ₹2.6 lakh in 10 years, ₹6.7 lakh in 20 years and over ₹17 lakh in 30 years, without adding anything more.

The biggest factor is time. Someone who starts investing at 25 usually ends up with far more than someone who starts at 35, even if the later starter invests more each month. That is why starting early matters so much.