Money Matters: Compounding Rewards the Patient Investor

USA Today published an article in October of 2025 stating there is more than $2 TRILLION in forgotten/left-behind 401(k) savings accounts.¹

Our response to that might be surprising, even if slightly sarcastic – “Good.”

Here are some phrases that have been around for many years, and while not all cliches are true, these two have stuck for good reason.

“Time in the market beats timing the market.”

“Compound interest is the eighth wonder of the world.”

One of the best things you can do for your long-term wealth with your old 401(k) is leave it alone. Stop watching it and let time do its thing.

That can sound almost irresponsible but only because it is slightly oversimplified. Of course, it is still critically important to make sure you are allocated appropriately and that all of your accounts are considered when building out your investment plan. The point remains that doing nothing at all can sometimes be the best thing to do.

Did you check your balance every day during the 2020 COVID crash, the 2022 interest rate/inflation shock, or any of the other moments of panic over the last two decades? Were you asking yourself, “Should I be doing something?”

If you forgot about your 401(k), you never had to be disciplined because you were never tempted. The market did what it has historically done over long periods. And when you finally checked the balance, the number had made you smile.

That is not luck. That is compounding.

Here is what compounding looks like in practice:

If you invest $100,000 and it grows at an average of 7 percent per year, you have roughly $200,000 in ten years.

In twenty years, nearly $400,000. In thirty years, close to $760,000. You did not add another dollar. The growth built on itself, year after year, whether you were watching or not. *This illustration is hypothetical and is not meant to represent any specific investment or imply any guaranteed rate of return.

The long-term history of the stock market supports this. Since 1926, the S&P 500 has produced positive returns in roughly 75 percent of calendar years. The negative years were painful in the moment, but largely irrelevant over a full investing lifetime. Every bear market in history has eventually been followed by a new high.

This is exactly what Bucket 3 is designed to do. Capture long-term growth.

Bucket 1 holds one to three years of living expenses in stable, liquid assets.

Bucket 2 covers years three through ten in more moderate investments.

Bucket 3 has a different role. It does not need to fund next year’s income. It does not need to be touched when markets drop 20 percent. It is given something rare in our current world. Time.

The entire purpose of the three-bucket strategy is to protect that time. Because Bucket 1 and Bucket 2 are in place, you aren’t forced to sell long-term investments at the wrong moment. That function is what allows Bucket 3 to do its job.

So, the next time the market drops and the headlines turn negative, think about the people who forgot about their 401(k). They did not have perfect timing or a complex strategy. They simply stayed out of their own way long enough for the math to work.

That is exactly what we help you do. This is one of our core systems to help Simplify Life, Reduce Stress and Inspire Confidence.