MEPX
Chapter 9 of 10All chapters
  1. 1Simple against compound
  2. 2The arithmetic
  3. 3The rule of 72
  4. 4Why starting early wins
  5. 5Compounding against you
  6. 6Compounding frequency
  7. 7Real against nominal
  8. 8Fees compound too
  9. 9Regular contributions
  10. 10Exponential thinking

Chapter 9 of 10

Regular contributions

Adding as you go.

Two engines

Growth compounds on what is there, and contributions add new capital that starts compounding too. Together they produce most long-term wealth for ordinary earners.

  • Increasing contributions with each pay rise is the least painful method.
  • Automating removes the monthly decision, which is where consistency usually fails.

A caution about projections

Any projection assumes a steady rate. Real returns arrive unevenly, and the order matters if you are withdrawing rather than saving.