I'm sure most everyone here has read about the power of compounding, but sometimes when you see it in action, it really is surprising.

I write this after reviewing my first quarter numbers for my four retirement funds (ok, I know thats probably too many, but it was six different a year ago, so I look at this as progress!). Two of them are old accounts that I am letting stay where they are. In comparing those two I have one account that has been going gangbusters with a return for the quarter of about 10%. The other has been ok but nothing great, returning maybe 4-5%. But the great account was at about $10k at the start of the year, whereas the so-so account started the year at $25k. Since these are old retirement accounts, there are no new investments.

I compared the difference between the two accounts at the beginning of the year, and at the end of the quarter and found the dollar difference between the two barely budged, maybe a $50 change.

So what is this showing? Well with the head start of $15k, even with superior performances from the smaller account, it most likely will never catch up to the bigger account. This just falls right in line with what all the beginner's investing articles say, that investing early is very important, and compounding is certainly your friend.

And now... I'll return to cursing at my computers, as I am down to using backup number two (a $15 machine I got for the heck of it last year) to get onto the internet.