Compound interest in plain English
Compound interest means earning returns on your original money and on the returns already earned. Over long periods, that creates a snowball effect where growth starts slowly and then accelerates.
Why time matters
The earlier you start, the more compounding periods your money has. Regular contributions help, but time is the part that is hardest to replace later.
Debt compounds too
The same logic can work against you with high-interest debt. Credit card balances can grow quickly when interest is added and the payment only covers a small part of the balance.