Compound interest is the foundational pillar of the FIRE movement. It is interest earned on interest, causing your wealth to grow at an exponential rate rather than a linear one. The sooner you start saving, the greater the compounding effect becomes.
In the early years, your portfolio growth will feel slow and unsatisfying, driven mostly by your savings rate. However, around years 10 to 15, the investment returns start outpacing your contributions, representing the crossover point where your money does more work than you do.
By optimizing your savings rate, cutting investment fees, and reinvesting all dividends, you shorten the time needed for compounding to take control. Run scenario sandboxes regularly to model your asset curves and watch your target date accelerate.