Most Compounding Interest Benefits Occur at the End

Due to the nature of compounding interests growing exponentially over time, the immediate benefits of such an effect are small compared to the benefits at the end. This can make it hard to see how certain actions and behaviors lead to compounding because it can take a long time. It makes intuitive sense for things like money (people understand to contribute to a 401k for example), but requires more faith for actions like reading a lot. This explains why a lot of good advice is unlikely to be followed and example of Gate’s Law.

See also:

  • Naval Ravikant talks about the importance of compounding interests in life and wealth creation.