Strategy
Compound interest is earnings on earnings already made: the most important growth driver in long-term investing.
The compound-interest effect (compounding) arises when earnings (interest, dividends, capital gains) are reinvested and themselves generate further earnings. Albert Einstein is said to have called it the "eighth wonder of the world".
An example: 10,000 EUR at a 7% annual return grows to roughly 19,672 EUR after 10 years, 38,697 EUR after 20 years, and 76,123 EUR after 30 years. Most of the growth occurs in the final years.
The compound-interest effect is why starting early matters so much: beginning 10 years sooner can double the final wealth. It works against you with costs and debt as well, which is why low investment costs and repaying expensive loans are so significant.
See taxes, dividends and allocation for your whole portfolio in one place.