Compound interest means you earn money not only on your original investment, but also on the growth from previous years.

If you invest $200 every month starting at age 25, you may end up with far more money than someone who starts later with larger amounts.

For example:

• Person A invests from age 25 to 35
• Person B starts at age 35 and invests more each month

In many cases, Person A still ends up ahead because their money had more time to grow.

The formula may sound boring, but the idea is powerful: The earlier you start, the less you need to save later.