Compound Interest — Mindset Theory
“Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it” — Albert Einstein
Compound interest is when the money you invest in the stock market earns interest on interest, making it way more powerful than simple interest. As you buy shares of a stock the number of shares you own increases, you may receive a dividend from that stock & it is calculated into a percentage using the annual dividend per share divided by the stock’s price per share. This means that the more shares you have, the higher the dividend payment you will receive. If you automatically reinvest dividend payments & buy more shares, this will result in a higher dividend payment next payout, & so on. This is compounding interest! Money working for you 24/7 & making you more money!
Financial Freedom — When I was 21, I found myself thinking about all the people in the world living paycheck to paycheck or with no paycheck at all, & I didn’t want money to be a problem for my family! So, I stumbled across an audiobook on my audible app, titled “Financial Freedom” — Grant Sabatier. This book lay the foundation for my entrepreneurship journey & my initial introduction into the stock market! I became fascinated with the concept of money working for you! You put in the work upfront, whether it be through a side hustle, or a 9–5, & your money works for you for the rest of your life!
Millions in Retirement — Sounds good right? Your money works for you 24/7 & you can sit back in retirement with millions in your bank account. Well, it’s not unrealistic…the younger you are the better, so start ASAP! But that doesn’t mean you’re too late! Second best time to start is now, the first best time was yesterday! if you are in your 20’s, you could retire with millions with just $100 a week invested for 40 years. Don’t believe me? Click here to play around with an investment calculator! You can use 8–10% return which is super realistic if you invested in low fee index funds. I talk about these in my Introduction to the Stock Market.
Generational Wealth — What would it feel like to have the freedom to buy anything you want? Never having to worry about money ever again. Take your family on luxurious vacations, pay for your kids’ college, have the dream car you always wanted. All because you read this blog & decided to earn & invest large sums of money! People have done it & you could too! Some IRA accounts have a contribution limit, like a Roth IRA. But other accounts, like a Traditional IRA, don’t. This is huge if you have access to large amounts of money. It’s safe to say that young people are making exorbitant amounts of money now a days. So, we know, through the power of the internet, there are ways we can achieve this. If you want to dive deep into side hustles you could learn here. If you are amongst the people to figure it all out & make large sums of money, then you can earn massive profit with the power of compound interest! Just play with the investment calculator & you can see how powerful large sums of money can be! For example, if you invest $2,000 a month over 40 years assuming a 10% return you would have over 11 million dollars. If you used the same formula:
$5,000 a month = >27 million
$10,000 a month = >55 million
Think about what happens to your money every month, because it could add up to massive sums of money you never thought would be possible! Thank you for reading my blog, I appreciate the support & I hope you all the best on your Entrepreneurship journey!
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Originally published at https://www.mindsettheoryofficial.com on May 25, 2023.