Compound interest is one of the most powerful forces in personal finance. Simply put, it's interest on interest, allowing your money to grow exponentially over time. The key to harnessing the power of compound interest is to start investing early and consistently. For example, if you were to invest $1,000 at an annual interest rate of 5%, after one year you would have $1,050. If you leave that money invested for another year, you'll earn 5% interest on $1,050, not just the original $1,000. Over time, this compounding effect can lead to significant growth in your investment portfolio. To illustrate this, consider two scenarios: one person starts investing $1,000 a year at age 25 and stops at age 35, while another person starts investing $1,000 a year at age 35 and continues until age 65. Despite investing the same amount of money, the person who started earlier will have a significantly larger portfolio at age 65 due to the power of compound interest. In conclusion, the sooner you start investing and the longer you stay invested, the more you can benefit from compound interest. It's a simple yet incredibly effective way to build wealth over time.