Compounding has positive asymmetry. A stock can only lose 100%, but it can gain multiples of that. This means a portfolio with one stock compounding at +26% and another at -26% doesn't break even over time; the winner's gains eventually dwarf the loser's total loss, leading to strong positive returns.

Common wisdom to rapidly pay off a mortgage is suboptimal. Due to compounding, investing extra cash—even if the return rate merely matches your mortgage interest—will generate significantly more wealth over time. One investment compounds up while the other debt amortizes down, creating a large wealth gap.

Analyst Harry Markopoulos identified Madoff's Ponzi scheme in five minutes, not with insider information, but by recognizing his promised 14% returns with no risk were mathematically impossible. Consistently perfect results are a major red flag, as even the best investors have down periods.

While Buffett's 22% annual returns are impressive, his fortune is primarily a result of starting at age 11 and continuing into his 90s. Had he followed a typical career timeline (age 25 to 65), his net worth would be millions, not billions, demonstrating that time is the most powerful force in compounding.

Due to the long-term effects of compound interest outpacing inflation, the opportunity cost of spending money when young is massive. A single dollar saved can grow to be worth $13 in purchasing power by retirement, turning a $500 splurge into a $6,500 long-term financial decision.

Warren Buffett's financial trajectory provides a powerful counter-narrative to tech's obsession with youth. His most significant period of wealth compounding occurred between the ages of 65 and 95, transforming him from 'pretty rich' into one of the wealthiest people in the world. This highlights the long-term power of sustained execution over decades.

The hockey-stick growth of compounding happens so rapidly that it feels unreal. Financially literate people who are mathematically independent often still seek validation because they can't psychologically accept the stunning results their own calculations show. The growth defies linear human intuition.

"Bold" investors chase high returns but risk ruin, yielding great arithmetic but poor geometric returns. "Shy" investors are conservative, surviving longer and compounding steadily, mirroring chipmunks who squawk often but live more seasons. This highlights an evolutionary trade-off between risk and survival.

The most valuable asset for a young person isn't income, but time. The first decade of compounding has an outsized impact on wealth creation. Delaying investing by just 10 years (from age 18 to 28) can reduce your total wealth multiplier by more than half, from a potential 80x to 33x.