01 The ally
Compounding: growth on the growth
Year one, your money earns a return. Year two, the return earns a return. Innocent at first — then it isn't. The rule of 72 makes it graspable: divide 72 by your yearly return, and that's roughly how many years a sum takes to double.
| At a return of… | Money doubles every… | $100k over 36 years becomes… |
|---|---|---|
| 1% (cash-like) | ~72 years | ~$143k |
| 2.5% (CPF OA floor) | ~29 years | ~$243k |
| 4% (CPF SA floor) | ~18 years | ~$410k |
| 7% (equities, after costs) | ~10 years | ~$1.14M |
Same $100k, same 36 years — the only variable is the rate. Note the shape: doublings stack, so the gap between 4% and 7% isn't "3% better", it's nearly triple the ending wealth.
Compounding back-loads its gifts: on a 40-year journey, most of the dollars arrive in the final decade, when the doublings are working on the biggest base. Which is why starting early beats starting big, and why interrupting the process mid-journey — cashing out, pausing for years — costs far more than it appears to.
02 The silent toll
Fees: 1% is never just 1%
A 1% fee sounds like losing 1% of your money. It isn't — it's losing 1% of the compounding engine, every year, forever. The same $100k for 20 years:
The first innocent-looking layer costs ~$55k of ending wealth, the second another ~$46k — money that compounded for someone, just not you. This is why the wrapper comparisons obsess over fee stacks: the layers, not the market, are often the biggest difference between two investors' outcomes.
For your money: fees are the one input you control completely — no forecast required. The discipline is simply knowing what you pay, in total, across every layer, and demanding that anything above rock-bottom earns its difference in services you can name.
For your life: that's the standard to hold me to as well. You should always be able to say what you pay and what it buys — and if I'm ever not making that easy, the three questions are there to be asked of me too.
03 The stealth tax
Inflation: the force that punishes standing still
Singapore's long-run inflation has averaged roughly 2% a year — gentle by world standards, and still ruinous to idle money. Run the rule of 72 in reverse: at 2%, cash halves in buying power every ~36 years. The dollars in a drawer at your child's birth buy half as much at their wedding.
| $10,000 kept as… | Buying power in 20 years (2% inflation) |
|---|---|
| Physical cash / 0% account | ~$6,730 |
| At 2% — SSBs, keeping pace | ~$10,000 — treading water, safely |
| At 5% growth (~3% above inflation) | ~$17,900 of today's dollars |
Inflation is why "doing nothing with money" is itself a position — a guaranteed slow loss. Safety has a real price, worth paying on purpose for the money that needs it, and nothing more.
04 The synthesis
All three at once — the whole of investing in one sentence
Put the forces side by side and the entire discipline of investing compresses into a single instruction: give compounding the largest possible base (start early, drip steadily), defend it from fees (know every layer), and outrun inflation with money that has time to ride the ladder.
- Everything in lesson one was about picking the vehicles that outrun inflation.
- Everything in lessons two and three was about not interrupting compounding when markets get loud.
- Everything in lesson four was about feeding it without needing courage.
That's Finance 101 — not so you'll run the machine, but so you'll recognise every part of it on your statements, and know why it's built the way it is. The next time markets make the news, you'll know which force actually matters that day. (Usually: none of them. The quiet ones don't do news.) Questions any lesson raised about your numbers — that's exactly what a conversation is for. How I help →
Sources & notes
Figures updated 2026. Singapore long-run inflation (~1.9% p.a., 1981–2020; core averages near 2%): MAS. All compounding, fee-drag and inflation tables are arithmetic at the stated rates — verifiable on any calculator, which is rather the point. Rate choices (2.5%/4% CPF floors: CPF Board; ~7% equities after costs: long-run index data less typical fees) are illustrative anchors, not forecasts.
General information, not financial advice. Jonathan Wong is a licensed financial adviser representative in Singapore, currently between firms — during that period he is not able to provide financial advice. You can check his registration yourself on the MAS Financial Institution Representatives Register at eservices.mas.gov.sg/rr.