Back in 1990, when I wrote my second book, More Money, I included a chapter called ''The Fairy Godmother and the Magic Train''. The purpose was to illustrate the power of compound interest, and it told a fable about a good fairy who visits all new parents to tell them about a ''train'' that could take the young child to wealth.

The fare to take that train journey is just $2.83 a day ($1000 a year) provided the parents start immediately: the pay-off is that the child could have $3.8 million at age 65, which is the end of the journey. The figures are based on the assumption that the money is invested in quality share trusts, and that these trusts earn an average of 9 per cent a year if all income is re-invested.

A story about a magical train is a good allegory for compound interest.

Boarding the ''train'' is free if they start paying the $2.83 a day from the day the child is born. However, as each year passes its value grows as compounding works its magic. Therefore, a person who delays starting the program will have to pay an increasingly heavy price to get on board the "train" if they wish to have the same sum at age 65 for an investment of just $2.83 a day.

For example, if you started the program when your child was born, the "train" could be worth $6000 at age five, $16,000 at age 10, $62,000 at age 21, and $152,000 at age 30. These figures also represent the ''boarding'' cost for anybody who wanted to join the program later.