Compounding Interest separates the rich from the broke.
The great Albert Einstein once said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
When’s the last time you saw a high interest credit card balance move much lower after making a payment? When you get into high interest debt, you are now fighting against the inevitable force of compounding interest.
Why fight up a hill when you can instead run down it?
While everybody might know that interest is bad, only a few people decide to do something about it. And if I can be quite frank, it’s why broke people are broke and rich people are rich.
Nobody makes a real fortune overnight, and nobody goes broke in one night either. The exceptions to the rule regress back to where they should be over time. That’s why lottery winners oftentimes end up broke years later.
It’s the habits that you live with which define your wealth. If your spending habits cause you to fight against interest, you’re going to fight that fight the rest of your life. And sorry but, you’ll never be rich.
However, if your habits create interest for you, then just sit back and relax. You will one day be rich, you just have to let compounding interest do the work for you.
Compounding Interest can save our kids’ generation.
Let’s face it. Our generation isn’t very good at giving future generations a leg up in this world. It’s always been this way. I mean how big a mess has our parents’ generation left us?
It saddens me to see such disregard for the future. Everyday, we have people who live in a mindset of scarcity instead of abundance. People who are destroyers instead of creators. This isn’t the world I want my daughter to grow up in.
What if we lived in a world where everybody took responsibility for their finances? What if we all decided to kick our debt habits, and build wealth for our family and future generations?
If $5,000 a year can turn into $2.4 million in 40 years, imagine what it would do in 60. It would be $16,691,244, which is of course outlandish. Nobody has that kind of money to save for their kids. But what if we saved just a little bit for them. Like $500 a year. In 65 years, it could grow to $2,691,112.
What if we did this for our kids, and they did it for theirs? The wealth could compound, until the whole world was living with financial freedom. It starts with one person, but could later affect many.
Really, it starts with you. I’ve had a Compound Interest Calculator create so you can see for yourself the power of this magical principle.
If you want more wealth and abundance in this world, be the change. I believe in you, my future millionaire, because I know you can make a difference.
If you’ve been reading all the way through, you’re already better than 90% of the world. You CAN take the 8th wonder of the world and do something great with it! You can, compound your interest and life the life you desire.
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This fact should have been driven into my head when I was young. Compounding interest gave me a broad long term perspective on what investments are vs gambling. It's nice to take profits from quick trades and maybe get lucky in chasing hype but I found it more exciting to know that I lose less money when more than half of my portfolio is spent on growing money passively and with compounding interest.
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@Adamada I couldn't have said it better myself! I spent so many years chasing impossible returns instead of focusing on dollar cost averaging and focusing on building wealth over the long-term.
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Beautiful, my habits mostly adds value to me rather than take take out value from me. You're right sometimes we indulge in things that naturally diminishes or not add value to us and sometimes even when we're not aimed at becoming wealthy or rich, it's still proper for what we do to add to what we already have. Beautifully written.
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@josedicus I lover that you have built habits that add value to you! What would you say is one of those powerful habits?
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Yes! Thank you for this post. Sometimes we feel we are too late, but if we start for our kids or even grandkids, then we realize we are early.
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@metzli You and @jahedhossain Have the right idea! I built my wealth through buying 1 house per year for the last 7 years and that simple consistency has made me a multimillionaire. Now I am applying the same process to crypto, stocks and precious metals like gold and silver. Staying focused and consistent with your investments over a 5-10 year timeline will yield un-real results!
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Pretty interesting concept. Now I am thinking to buy 50$ worth of cryptos every month until I reach the threshold of 2000$. No matter what happens in crypto space I will hold all of my cryptos until the next 10 years. Though the investment is not big enough, still I think after 10 years of my initial investment will be 10x or more.
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Sounds like a solid plan - don't wait for a coin to go 10x instead, give it time to naturally do so.
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STOPThis is the sort of practical financial advice that should be taught early on in schools, but isn't. It's something I had to learn outside of class all on my own, but whose power when realized, is amazing. The thing is to learn it at a young enough age that you have many more compounding years ahead of you, in order to live a more fulfilled life.
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@evernoticethat so true. The earlier you can put this principle to work the easier your life is. Especially if you bought TESLA 10 or Bitcoin years ago, lol
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I wish I knew this magic when I was a kid
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LOL, couldn't have said it better.
The new age is comin'.
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if you have debt, pay it off, that is the most important thing
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Very true and why the rich just get richer. Just looking at your stuff now and would like to actually start something from January along those lines. No time like the present to kickstart something. Had a policy pay out and a good starting amount to begin with. I was going to reinvest it anyway as it was for a mortgage on a house that I had already settled.
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For sure that is one of my most loved topics.
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I love compounding profits and building my accounts over time. For me is goes to multiple revenue streams that over time can be reinvested and compound.
I have made some quick cash in trades but most of the work i do online is set up to reinvest into other schemes and keep expanding my portfolio.
That is part of why i love hive as it keeps growing just from being active. With other dapps now built onto the system it gives a chance to earn multiple times on the one piece of effort.
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I wish I would've learned about it in school instead of all the bullshit I learned about and never do anything useful with! haha.
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I love compound interest. Especially as you get older and you get to see the benefits of it increase more and more. I remember my small investment account used to be worth so little and it used to seem like it was growing at a snails pace. Now that I am older, the yearly gains are more and more. I look forward to seeing what it looks like ten years from now.
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