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Growth Summary
Year-by-Year Growth Table
| Year | Portfolio Value | Total Contributed | Total Returns |
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The Power of Compound Growth
Albert Einstein reportedly called compound interest the "eighth wonder of the world." Whether he said it or not, the mathematics are remarkable: money invested early grows exponentially, not linearly. R100,000 invested for 30 years at 10% becomes R1.7 million — without adding another cent. The same R100,000 invested for only 20 years becomes R672,000. Ten extra years almost triples the outcome.
Why Starting Early Matters So Much
The most important variable in compound growth is not the return rate — it is time. Starting five years earlier has a larger impact on your final portfolio than increasing your monthly contribution by 50%. This is the core argument for FIRE: the earlier you start, the less you have to save, because time does the heavy lifting for you.
Realistic Return Expectations for South Africans
The JSE All Share Index has delivered approximately 10–14% annually over long periods (nominal). After inflation (typically 5–7% in SA), real returns have been 4–8% historically. For conservative FIRE planning, use 8–10% nominal or 4–6% real. Offshore exposure (through your TFSA or a direct offshore investment) adds currency diversification and may improve long-term returns.
Frequently Asked Questions
For South African equity (JSE), 10–12% nominal is a reasonable long-term assumption. Use 8% if you want to be conservative, or 6% if investing in a balanced fund with bonds. Always sanity-check your assumptions against historical data.
No — it uses nominal (pre-inflation) returns. To calculate real (after-inflation) growth, subtract your expected inflation rate from the return rate. For example, 10% return minus 6% inflation = 4% real return.
This calculator compounds monthly, which is how most investments actually work. Monthly compounding produces slightly better results than annual compounding at the same stated rate.