Tips To Living A Simple Life!
Compound Interest
Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who does not ... pays it.

Compound interest should be your focus.



Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who does not ... pays it. 

Compound interest is the most powerful force in the universe. 
 Compound interest is the greatest mathematical discovery of all times. 

- Albert Einstein 

Most people are content with 10% of compound interest a year. Let us say you started with $1,000, added $360 (maybe more or less depending on your finances) a month, made 10% a year for 15 years. One reason if you start investing at the age of 18 it takes 44 years to retire.  
 Balance will be: 
 Total Principal Amount: 65,800.00 
 What would it look like if you started with $1,000 added $360 a month, made 20% a year for 15 years? 
 What would it look like if you started with $1,000 deposited $360 a month, and made 10% a month for 15 years? Keep in mind most people are happy if they get 10% a year. 
 Look at that amount for ten years.  
Principal Amount: 1,000 

Monthly Deposits: 360 

Period (month): 180 

Annual Interest Rate: 10% 

Compounding: Annually. 

 

Interest Amount: 82,960.89 

Maturity Value: 148,760.89 

APY: 10.0000% 

 

Principal Amount: 1,000 

Monthly Deposit: 360 

Period (month): 180 

Annual Interest Rate: 20% 

Compounding: Monthly 

Balance will be: 

Total Principal Amount: 65,800.00 

Interest Amount: 362,141.16 

Maturity Value: 427,941.16 

APY: 21.9391% 

Let us look at that same thing but for ten years. 

Principal Amount: 1,000 

Monthly Deposit: 360 

Period (month): 120 

Annual Interest Rate: 20% 

Compounding: Monthly 

Balance will be: 

Total Principal Amount: 44,200.00 

Interest Amount: 100,719.13 

Maturity Value: 144,919.13 

APY: 21.9391% 

 

Principal Amount: 1,000 

Monthly Deposit: 360 

Period (month): 180 

Annual Interest Rate: 120% 

Compounding: Monthly 

Balance will be: 

Total Principal Amount: 65,800.00 

Interest Amount: 140,011,848,239.10 

Maturity Value: 140,011,914,039.10 

APY: 213.8428% 

Principal Amount: 1,000 

Monthly Deposit: 360 

Period (month): 120 

Annual Interest Rate: 120% 

Compounding: Monthly 

Balance will be: 

Total Principal Amount: 44,200.00 

Interest Amount: 459,788,821.34 

Maturity Value: 459,833,021.34 

APY: 213.8428% 

I started trading stocks at the age of 18 when I learned my company did not contribute anything to our 401K. It took a lot of hard lessons, years of study and experience to be able to overcome the 10% a year I refused to settle for. No matter if you decide to handle your own money or let an All-Star Mutual Fund handle it, focus on the compound interest. The more you can put in the better. I authored a book of my experiences and kept it simple, also showing what I found to work best. You can find it in the book below. Ten percent a month is a possibility. No matter what download a compound interest calculator and play around with it. Set your goals and hit them. The one I used above is FN Calculator. I keep it downloaded on my phone. 


Understanding compound interest is something that can make living a simple life really simple. 

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