Win big through Compounding Interest June 11, 2014 – Posted in: investing – Tags:

Win big compound interest, compound interest accounts, compound interest examples, compounding interest, interest formula

We have all heard about compounding interest right?  Win big Your money can grow upon itself year after year if left untouched in an interest gaining account.

Now, this might not sound too sexy but think about this on a big scale.  Imagine millions of dollars doubling in value at ten percent interest.

Win big

But you need to have your money in an account that is gaining interest.  Let us look at the chart below.  Bob and Alice both start with the same amount of money but Alice becomes infinitely more wealthy with the same amount of savings.

compounding interest

My best tip on the whole thing?  Start young as an invester and it can payoff latter years into the future.

Compounding interest is an interesting concept because we are talking about mathematical growth.  Money is a great subject for math experts because it is numerical and easy to calculate.

Although not everything is easy to calculate, the concept of compounding interest is universal in many ways.

Think about the information you expose yourself to and the people you spend time with.  Are these things going to compound over time for you or bring you down?

This is a serious question and really something to think about.  You might love watching reality TV and drinking beer with your friends, and this can be fun at times, sure! But if you are wasting large portions of your time life on a regular basis your growth and potential will be limited in much the same way Bob’s earnings is.

Compounding interest is like building upon a physical structure.  Its like putting various components of a business together peice by piece until it eventually becomes something very interesting.

interest

Anther example is learning a new skill.  If you learn just a little bit about something every day, in a week you will be a beginner, but in a year, you will start to develop some impressive competencies.  In ten years, you can become world class at something if you have a bit of natural ability.

Compounding interest works in every part of our life.  If we invest a bit each day, or each month, or each year, the results will be reflective of our efforts.  In twenty four hours we have limited power, but across months, years, and decades, each effort multiplies in a huge way.

So what do you want to become good at?  And what do you want to focus on in life?  If you know your personal values, you will know what you can do to put your life on the good trajectory.