Reinvestment

Using an investment's income or gains to buy more of the same investment, rather than taking them as cash.

Example

Automatically reinvesting a fund's dividends to buy more shares instead of withdrawing the cash.

Reinvestment is what actually produces compounding - a return you spend as it arrives cannot compound.

Compounding — Earning returns on your past returns, not only on your original money.
CAGR (compound annual growth rate) — The single steady annual growth rate that would take a starting value to an ending value over a given number of years.

The schedule, and the part of the return nobody prints on it — A bond's cash flows are written down in advance. What those cash flows finally compound to is not, and that gap is where the quoted yield quietly makes an assumption on your behalf. (11 min)
IRR: the measure that knows about time, and what it assumes — IRR is the rate at which every cash flow discounts back to zero. It is the right tool for irregular timings, and it systematically flatters anything held briefly. (14 min)
How compounding works — Compounding is earning returns on your returns, not just your original money - and time, more than the rate itself, is what makes it powerful. (12 min)