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The arithmetic of patience

यह लेख अभी सिर्फ़ अंग्रेज़ी में है। हिंदी संस्करण जल्द आएगा।

Compounding is simple to explain and hard to feel. For years it looks like nothing is happening. Then the curve bends.

A simple example

Say you invest ₹5,000 every month and earn 12% a year. After 20 years you have put in ₹12 lakh. At a constant 12%, that money grows to about ₹46 lakh. Most of the growth arrives in the last few years.

This is an illustration at a constant rate. Real returns go up and down every year, and nobody can promise 12%. The point is the shape of the curve, not the exact number.

Why it feels slow

In the early years, the money you add each month is bigger than the growth on what you already have. Only later does the growth start to outweigh your own contributions. That is when patience gets paid.

What this means

  • Starting early matters more than starting big.
  • Stopping halfway gives up the steepest part of the curve.
  • Time in the market does most of the work.

Try it yourself with the compounding calculator: change the years and watch where the curve gets steep.

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