Red Line 7

Time does the heavy lifting.

You put €100 a month aside, growing 6% a year. Pull the line to the age you start.

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Red Line 7 of 48 · Shelf 2 · Time

Red Line 7 of 48

Growth on growth needs years far more than it needs brilliance.

The idea

Each year’s growth starts growing too. The longer it runs, the faster it climbs, without anyone doing anything clever.

The numbers

€10,000 at 7% a year: about €20,000 after 10 years, €76,000 after 30, €150,000 after 40. The last 10 years add more than the first 30 together.

Where you see it

Most of a famous investor’s fortune came after he turned 65. He was good, but mostly he started young and kept going for decades.

Where it bends

Compounding needs a real return above zero. Below it, growth on growth works against you, as with debt or high fees.

This game’s numbers

The growth: worked out on this page

How strong the proof is

=Outside the four steps: it follows from the arithmetic

True by the sums

Growth on growth is arithmetic: the same return over twice the years gives far more than twice the gain. Real returns above zero make it work.

Triumph of the Optimists: 101 Years of Global Investment Returns Elroy Dimson, Paul Marsh & Mike Staunton, Princeton University Press, 2002

Checked 2 Nov 2026 · How we grade

A Strong proof: Many good studies or long official data, from different teams or countries, point the same way.
B Good proof, with limits: Solid studies agree on the direction, but the size varies, or the data covers few places or few kinds of people.
C Mixed proof: Some good studies for, some against, or the evidence covers only part of the line.
D Thin proof: Mostly one book’s argument, one survey or stories. It may be wise, but it has not been tested well.
= True by the sums: It follows from arithmetic, so no study can overturn it. We still show what real data says.

Where it comes from

Morgan Housel, The Psychology of Money (2020). In our words, not quoted.

See it in numbers: Compounding · Start early (From Zero)

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