
How compound interest works, with the actual numbers
Saving a modest amount every month looks small at first. The shape of the curve is the whole story, and time matters more than most people expect.

Saving a modest amount every month looks small at first. The shape of the curve is the whole story, and time matters more than most people expect.

The idea is appealing: give up a $5 daily coffee, invest the savings, and retire rich. The maths is not wrong. The advice is just aimed at the wrong target. A $5 coffee on every working day comes to…

… than a pricier flight to somewhere where daily costs are low. Where the savings are 1. Accommodation location. A place slightly outside the centre, near good public transport, often costs much less…