Compounding means earning a return on returns already earned. It sounds trivial and it is the reason a small amount invested early can end up ahead of a much larger amount invested late.
The rule of 72 makes it tangible without a calculator: divide 72 by the annual return and you get roughly the number of years it takes to double. At 7% a year, money doubles in about ten years; over forty years that is four doublings, turning one unit into sixteen.
The consequence is that the first years of contributions do most of the work, because they get the most doublings. This is also why interrupting the process is expensive: money withdrawn early does not just cost you its value, it costs you every doubling it would have gone through.
Compounding runs in both directions, and losses compound too. A portfolio that falls 50% needs to double just to return to where it started, which is the arithmetic argument for caring about drawdowns rather than chasing the highest possible return.
The practical version is unglamorous: contribute regularly, keep costs low, and leave the horizon long. Nothing about that requires predicting anything, which is precisely why it survives being wrong.
Educational material. Not investment advice.