Tuesday 8 March 2011

The Power of Compound Interest

Albert Einstein once said that “The most powerful force in the universe is compound interest”, and I certainly agree. The cumulative effect of earning interest on previous principal and interest means that the sooner you  start saving the more you will earn.


 However, the trick is to find assets that beat inflation and simply term deposits considerably every year, and that's where smart investing and trading comes in. Here's a quick video on how powerful compound interest is when you start early:   




So if you can save a little bit each month and have good money management, anyone can retire in comfort. In my next few posts I'll talk about my own investing strategy at the moment and how I'm beating term deposits by saving and trading shares myself. 

18 comments:

  1. very cool ive always found that concept to be super interesting as well as helpful! but also kinda stealing from the poor :/ oh well ride the system wooo!

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  2. interest makes the world go round..

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  3. what about money market accounts?

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  4. If Einstein said it..


    it MUST be true :D

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  5. People def need to read up on this more. Good job with the blog.

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  6. Very good advice, thanks for sharing!

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  7. wow. i will research more in compound interest.

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  8. Money is always interesting :> nice blog.

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  9. Interesting enough. I used to transfer money to Active Deposit account to keep up with the inflation. However inflation itself was greater than 8% offered by the bank.

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  10. This comment has been removed by the author.

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  11. Interesting, but i'm always worried about inflation rates when it comes to strategies like this.
    Still +followed.

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  12. Everyone talks about this but, I dunno

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  13. Wow, awesome post! I'll def. keep an eye out for your blog, follow :) Keep going!

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  14. Will definitely be coming back for more info, especially since it looks like your an Aussie local too so should be extra relevant!

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  15. Awesome video, thanks for the info.

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