Compound Interest-The Greatest Force You Need To Become Wealthy

Do you ever worry about losing your money when you think about investing?

Do you ever procastinate investing ?

Do you get confused with investing terms…. Like return on investment (ROI)… P/E ratios ( profit earnings ratio)?

Are you interested in investing in real estate… however you don’t know a how to start?

If you answered YES to any of these questions…then this article is for you.

The truth is  this when it comes to investing money you only need to know a few facts about investing…

once you know them and use them in your investing plan…you can become wealthy easily

You see, investing is a skill you have to learn.

In order to become experienced in a skill you need to practice the skill until you become adept …

However you cannot become good at a skill …if you don’t know the secrets to becoming skillful at learning  a skill.

In today’s article, I want to share one of these often ignored facts about investing.

Warren buffet knows about this  fact and has become one of the richest person on the planet because of it… you too can begin to use it to  accumulate wealth.

Before I do …Let me tell you a a true story of a woman who channelled this force to leave a legacy for her alma mater…

How a Frugal lady left  $7 million Legacy using this force

 

The story started in the March 6 2010 Los Angeles tribune article like this:

Like many people who lived through the Depression, Grace Groner was exceptionally restrained with her money.

She got her clothes from rummage sales, walked rather than buy a car. And her one-bedroom house in Lake Forest, Ill., held little more than a few plain pieces of furniture, some mismatched dishes and an old television.

Her one splurge was a small scholarship program she had created for Lake Forest College, her alma mater. She planned to contribute more upon her death, and when she died in January at 100, her attorney informed the college president that the gift had added up.

Groner’s estate, which stemmed from a $180 stock purchase she made in 1935, was worth $7 million.”

The money is going into a foundation that will allow many of Lake Forest’s 1,300 students to pursue internships and study-abroad programs.

How was a single lady who bought just $180 stock purchase…who never invested any more money in the stock market … leave a fortune for her alma mater?

The answer is simple.  Her little investment of $180 grew over time with compound interest.

The eight wonder in human history

 

When asked to name the greatest invention in human history, Nobel laureate Albert Einstein chose  compound interest.

Compound interest is one of the greatest forces in the universe according to experts.

In simple term, when you invest money  with compound interest, money work for you.

Investing money with compound interest is magical..when you consider how a  small lump of money grows into a fortune with time.

Let me explain….

Lets say you invested a lump sum of $10,000  in  the stock market and reinvested  the interest earned for the next  4 decades…..

The following is a chart of what your money will earn …assuming interest rates of 4, 8, 12 and 16 percent

4 % 8% 12 % 16%
10 years 14,908 22,196 33,004 59,693
20years 22,226 49,268 108,925 356,328
30 years 33,134 109,357 359,496 2,127,038
40 years 49,398 242,733 1,186,497 12,696,975

Figure 1: Compound interest tables- The value of $10,000 invested as a lump sum

 

As you can see , your $10,000 invested at an annualised rate of 16 percent will be worth over $12 million dollars after 40 years assuming you only invested it as a lump sum

and never invested any more money.

Here’s why I think most investors fail to become wealthy…they invest in the  stock market on the short term…hold on to stocks when they are gaining value …and sell at any sign of the market dipping.

You can make use of this powerful force by doing what successful wealth builder do…

…find good investments that have strong fundamental for increasing your money

…when you invest your money into these investments…never ever sell them

The good news is that even  if you have no money you can start with as little as $100 and then make a payment of $50 monthly and you will end up a millionaire…that is if you start early enough.

I believe you can start today on your path to wealth. All you need is to find that $100-250 and start your journey to financial freedom.

To your success

Akin Osho

Useful resources

If you want to know more about how to invest and become a millionaire with $50 a month check out these source:

https://www.50dollarsamonth.com/docs/Millionaire2012.pdf

Check out Drip investing sources:

sharebuilder.com

www.computershare.com

www.dripcentral.com

www.dripinvesting.org