Law of Compound Interest

The more you save, the longer you save it (earlier in life), and the higher the rate of return (careful of that which is too good to be true), the bigger your pile…

compound interest

Notice the earlier you save at the same rate, the lesser the amount of money you need to put away every month. If you can get a higher rate of return (again, be careful of too good to be true…S&P 500 Index is just fine at 8-9%/yr), the bigger your pile as well…

rate of return

Still have your doubts, try this compounding experiment… fold a napkin on itself 50 times…when done, it could go to the moon and back 1,179 times! If you figure you can double your income every 8 years at 8-9%/yr, imagine the possibilities!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s