To take maximum advantage of the power of compounding, you'll want to start saving for the future early. The chart shows the results of two investors, one who begins saving at 25 and another who waits until 35.

Investor A sets aside $3,000 a year from the time he's 25 to the time he's 35. Over those ten years, he puts a total of $30,000 into that account, earning 5% interest that's compounded annually.

Investor B also sets aside $3,000 a year from the time he's 35 to the time he's 50, and earns the same 5% annually compounded interest. Over those 15 years he puts away $45,000, or 50% more than Investor A.

Compare what each has at the age of 50.

Even though he saved more money, Investor B was unable to catch up with Investor A's early start.