Albert Einstein once said that compound interest is the eight wonder in the world. If you know about this you will never poor. What is compound interest? and why it can make you never poor?
Compound interest is the addition of interest to the principle sum of loan or deposit, it will be easier if i say interest of interest. The simple analogy is you invest your money and you will get interest from your investment, then you invest again your interest, and you accumulate it again and again.
For Example if you start invest your money $1000 and interest rate is10%, you will get $100 as the result of your investment, and you start invest again you money plus your interest , so your investment will be $1100, and you do it over and over again.
Maybe you realize and say that $100 for one year is so small, how can we be rich from that things. For the short time investment it look small, but time is compounding interest friend. The longer your investment the result will be bigger. Your $1000 investment for 50 years will become $117.000, you do not need to add any more money in your investment.
You want to become millionaire? it was easy! if you put your first investment $1000, and you commit to invest $500 each month with the interest 10% then in 30 years your money will become $1,000,000. if you do it for 50 years your money will become $7.100.000.
What i describe is really possible, if you invest your money in S&P index market, it will give average return 10% each year. you do not need to be genius in stock market or learn about accounting or financial market. Just simply put your money there. The hardest part for everyone is commitment to invest every month and patience to wait until the fruit will ripe.
Now you already know about this hacks, you should already have no problem with lack of money anymore. A lot of people can save $1000 and forget that money for 50 years, you will get more than $100.000. Start investment as young as you can, the longer your investment the result will be higher.
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