Einstein called it the 8th wonder of the world, with good reason. I heard he was pretty smart.
Yet how many people take advantage of interest? I'd much rather have money do work than me, I've got better things to do.
Most people fight it by racking up debts and paying interest to banks and credit card companies to live above their means.(Visit How Big Is Big Enough?)
If you really want to become free like I do, remember: Interest should work for you, not the other way around.
Let's make it simple. Assume that your finances are stretched so thin that all you can save is $3 a day. One less cup of coffee a day, easy. Now invest it. Use the growth of the stock market for the last 40 years: 8%.
What do you get for giving up one cup of coffee a day?
Over the course of 40 years, you would save up about $48,000 ($3 X 365 days X 40 years). Not a bad chunk of change. Now we add the compound interest:
| Year | Total Amount invested at 8% |
| 1 | $1,296.00 |
| 5 | $7,603.11 |
| 10 | $18,774.58 |
| 20 | $59,307.51 |
| 30 | $146,815.04 |
| 40 | $335,737.25 |
One less cup for $300,000? Sounds fair to me!
60% of retirees in America have less than $1000 in savings to carry themselves through retirement. 60%.
How thirsty are you really?
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