The False Allure of Compound Interest You've seen compound
interest stories. Just save $10 or $50 a week or a month and in
25 or 35 years you'll have a fortune! It's not so simple. (See
also: Non-Financial Investments) The compound interest story
isn't wrong, exactly; it's simply misleading. It's misleading
for two big reasons. First, because things change. Second,
because the huge returns from compound interest are back-loaded
— they only come at the very end. Let's start with a simple
example, so we have something specific to talk about. According
to my financial calculator, if you invest $218 per month at an
8% return over the course of a 35-year career, you'll end up
with $500,000. Depending on your lifestyle that might or might
not be enough to retire on, but it would at least be a tidy
contribution to any retirement. It's a perfectly reasonable
calculation — I'm sure lots of people made that exact
calculation many times during the 1990s, when people actually
were achieving returns like that. I'm sure I