Compounding — your money earning returns, then those returns earning their own returns — sounds like a scheme when a finance guy explains it. It isn't. It's just multiplication, given a long time to work.

Here's the benchmark we use in the kit: $25 a week into an index ETF (a single fund, bought on the ASX, that spreads each purchase across hundreds of companies), assuming a 7% average annual return.

$25 a week at a 7% average annual return: contributions versus value at years 1, 5, and 10

Year	You put in	It's worth
1	$1,300	~$1,350
5	$6,500	~$7,800
10	$13,000	~$18,800

Assumes a 7% average annual return. Markets vary; this is an illustration, not a promise.

Notice the shape. In year one, compounding does almost nothing — you're basically just saving. By year ten, the market has added about $5,800 you never deposited, and the gap keeps widening the longer you leave it alone.

Only have $10 a week? Same table, same shape. Just scale every number down in proportion (about 40% of each figure). The habit is the point. The amount can grow when your income does.

A share trading account is a backpack: money goes in, money comes out, no special rules. You pay tax on dividends and distributions each year — often nothing at all under the $18,200 tax-free threshold once you are 18 (under 18, investment income in your own name is tax-free only up to $416 a year — Lesson 5 explains), and franking credits on Australian shares can even mean a refund — and capital gains tax only when you sell, halved if you held for more than 12 months.

Super is a safe with a timer. If you have a job, your employer already pays 12% of your wage into it (from 18, or under 18 if you work more than 30 hours in a week). It's taxed at a flat 15% instead of your marginal rate — and if you earn under $37,000 the government refunds up to $500 of that tax back into your super automatically (the low income super tax offset), so for most students it is close to tax-free going in. It's invested in shares for you, and it's locked until you're 60. You can add extra yourself — before tax through salary sacrifice (your employer's 12% and your top-ups share the $32,500 concessional cap), or after tax — and if you earn under about $49,000 and add $1,000 after tax, the government adds up to $500 on top.

Two footnotes: the lock is real (60, with narrow exceptions like the First Home Super Saver Scheme, which lets you take out up to $50,000 of voluntary contributions for a first home); and your super is already invested, so it's worth checking which investment option your fund has you in and what it charges.

The student rule of thumb: money you might want in the next decade goes in your own share trading account. Once you have a job with super, a small after-tax top-up is one of the highest-return moves available while you earn under about $49,000, because of the co-contribution — and salary sacrifice joins the list once you pay tax at 30% or more. Either way, the account matters less than the habit of filling it.

Figures are for the 2026–27 financial year and change each July. General information only — it doesn't take into account your objectives, financial situation or needs.

Meet two versions of you.

Version one starts at 22: $100 a month into an index ETF, every month, nothing fancy. By age 62, that grows to about $262,000 — assuming a 7% average annual return.

Version two waits for the real job, the right moment, the flat with a dishwasher, and starts the same $100 a month at 32. Same fund, same discipline, same assumption. By 62: about $122,000.

Same habit. Same monthly amount. The ten years of waiting cost roughly half the final number.

That's the uncomfortable part of compounding: the years you skip are the expensive ones, because they're the years with the longest time to grow. The $100 you invest at 22 has forty years to work. The $100 at 32 has thirty. Early dollars are simply worth more.

So here's the reframe. You will never again be as young — financially speaking — as you are today. The real job can wait, and so can the $1,000. The habit can't: any amount, on a schedule, starting before you feel ready.

Assumes a 7% average annual return. Markets vary; this is an illustration, not a promise.