Everyone talks about compound interest, but why do only a few people actually achieve high returns from it?

The answer is actually simple: compound interest is not hard to understand; what's difficult is that it completely goes against human nature.
First: Principal
The premise of compound interest is that you have money to invest.
Nowadays, many people are broke, as consumerism spends all their income, leaving no principal available.
If your investment ratio is less than 30% of your income, compound interest is basically meaningless for you.
It's not a market problem; it's a savings problem.
Second: The asset
Choosing the wrong asset is useless no matter how long you hold it.
In the past 20 years, the annualized return of the A-shares market has been less than 5%, failing to beat inflation.
The NASDAQ 100 has had an annualized return of over 13% since 1985, and the S&P 500 about 10%.
Compound interest requires a long-term upward-trending underlying asset.
This condition is met globally; the U.S. stock market is the closest answer.
But how many people can access U.S. stocks?
Third: Hold on
This is the hardest part and where most people fail.
The NASDAQ has experienced an 80% crash in 2000, a 55% drop in 2008, a 30% decline in a single month in 2020, and a 35% fall in 2022.
Each time, there were enough reasons for you to sell and get out.
Last week, the NASDAQ dropped 4%, and many people shouted "game over" and sold at a loss.
The real problem isn't market drops; it's that people's psychological perception of losses and gains is mismatched.
The pain of a 10% paper loss is much greater than the joy of a 10% paper gain.
So even though they know they should hold long-term, they sell during the hardest times, missing the subsequent recovery.
Fourth: Time
Warren Buffett now has over $160 billion, but before age 65, only 2% of his wealth was accumulated.
That means 98% of his wealth was built after age 65 through compound interest.
Most people start serious investing at 30, still switching around at 40, and only realize the importance of long-term holding at 50.
Compound interest requires not just vision but starting early and holding on consistently.
Time is the most scarce resource in compound interest.
I believe the difficulty is never understanding compound interest; it's starting today and resisting the urge to sell during every market downturn.
Most people can't do that, which is why most people miss out on compound interest.