See the hockey-stick growth curve that makes FIRE possible. Project how a starting investment plus monthly contributions grow over time — with the interest portion visible separately so you can see when compounding truly takes over.
Rule of 72 check
Your initial investment doubles in 1.5 years at a 7% annual return — monthly contributions bring the doubling earlier than the theoretical 72÷rate result.
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The low-cost index funds and zero-commission trades compounding the balance above have to live somewhere. These two have the lowest fees and cleanest UX.
Why we recommend it: Expense ratios under 0.05% keep more of your returns compounding instead of leaking to fees.
Earn 5%+ on your emergency fund and short-term cash while you wait to deploy capital into the market.
Why we recommend it: Cash earning nothing is cash losing to inflation. A HYSA is the minimum viable parking spot.
Track every dollar, surface spending leaks, and grow the monthly contribution above — the single biggest lever on the chart.
Why we recommend it: The final balance is almost entirely a function of how much you contribute each month.
Compound interest is interest earned on both the original principal AND on previously earned interest. Over time, this creates exponential growth — your money generates returns, those returns generate their own returns, and the effect accelerates the longer you stay invested.
The basic formula is A = P(1 + r/n)^(nt), where A is the final amount, P is principal, r is the annual rate, n is the number of times compounded per year, and t is time in years. With monthly contributions PMT, add PMT × [((1 + r/n)^(nt) - 1) / (r/n)].
At a 7% annual return, a $10,000 starting balance with no additional contributions grows to approximately $76,000 over 30 years. Adding just $200/month of new contributions pushes that total to roughly $320,000 — showing how consistent contributions transform the result dramatically.
For a diversified U.S. stock portfolio, 7% nominal (roughly 4% real after 3% inflation) is the mainstream historical assumption. Conservative planners use 5-6% nominal. For a bond-heavy portfolio, use 3-5%. Avoid projections over 10% — they overstate expected wealth significantly over long horizons.
At reasonable interest rates, compounding frequency has a very small effect — daily compounding beats monthly by less than 0.1% per year. Monthly compounding is the default assumption for most investment accounts and produces nearly identical results to daily over any realistic timeframe.
The Rule of 72 estimates how long it takes money to double: divide 72 by the annual return rate. At 7% returns, money doubles every ~10.3 years. At 10%, every ~7.2 years. At 4%, every ~18 years. Higher returns or more time are the two levers.
For retirement-specific projections with inflation and retirement age, use the FIRE Calculator. For stress-testing withdrawal scenarios, use the Withdrawal Simulator.
Where to put the money that’s compounding.
How the rate you save compounds, not just the investments.
Where to open a low-fee investment account.
Downloadable planning guide with savings-rate tables.
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