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Does Your Life Include a RIPE Plan?—Planning Tips for Retirement, Investing, Protection, and Estate Planning – Part 2 (Investing)
Does Your Life Include a RIPE Plan?—Planning Tips for Retirement, Investing, Protection, and Estate Planning – Part 2 (Investing) by: Janet L. Hall After reviewing your retirement plan, or lack of one, you might have had a huge eye opener to the...
Exchange Traded Funds: 7 Reasons They Beat Most Mutual Funds
There’s been a lot of recent talk in the financial press about exchange traded funds, or ETFs. Some of you may already be familiar with them, but my guess is for most individual investors, the term “exchange traded fund” is just another bunch of...
How Do You Rank in The Investing Hierarchy?
Copyright 2011 CashFlow Avenue
You probably have heard this saying before - "It is lonely at
the top." If you find yourself in this position, then you are
probably at the top of your own niche. Our society is made of
hierarchies. Most...
SIMPLE Retirement Plans
A relatively new type of retirement plan is now available to businesses with less than 100 employees. The new plan is called “SIMPLE” and it is easy addition to the employee benefits for almost any small business. The Small Business Protection Act...
Six Things To Do In A High Risk Market
When the market turns against you, what should you do? Sell everything? We discussed that choice in a recent column. Selling everything draws your “line in the sand” and announces that you have determined there is no future for you in the market.
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Achieve Financial Freedom using The Power of Compound Interest
Copyright 2005 William Tan
"The most powerful force in the universe is compound interest"
- Albert Einstein
Ask almost anyone about compound interest and you will hear them say "yeah, I know about it." If everyone truly understands what compound interest is, then we probably will not have so many people having credit card debts that is piled up to the ceiling. The sad truth is the financial sector is using this to their advantage against general public. They are making millions and millions from the people.
So what is compound interest?
To explain in the simplest way - basically interest paid on interest and principal over a period of time. If you have $10,000 today, and you make 3% per year from you bank, you would have $10,300 by the end of the year. If you continue to leave your money there for the 2nd year, you will now have accumulated $10,609. 3rd year - $10,927. So on and so forth. By compound interest, you are actually making your money work harder for you. $10,000 compounded yearly at a 10% per year will double your money in 7 years. In 28 years, you would have about $160,000.
$160,000 from a small amount of $10,000!
While all that sounds really nice and cool to be financially free when you retire - seriously, who would want to wait around to be that old to be finally financially rich? I certainly wouldn't be in that crowd. So how do we get this working for us?
Notice, how credit card charges can work against you? Or how your bank is telling you that they calculate interest daily that is supposedly to your advantage? Start to have an idea. The large
corporations are the one that are using this powerful tool to their advantage.
And what do we get? Well, mutual funds and stocks, typically, only provide yearly dividends. Likewise, the banks on their fixed deposits - yearly - with pathetic interest rates that is normally lower than inflation rates. You get a raise only once or at the most twice a year. Almost anything, which is to our advantage, is compounded on a yearly basis. So how can we make use of this incredible force to help us in our goal to achieve financial freedom?
For compound interest to work for us, we have to see frequent compounding. The more frequent the better it is. Half yearly compound is definitely better than yearly. Quarter is better than half-yearly. Compounding by the seconds would be most ideal and compounding interest over a long period would really magnify its power. So, when you want to see the real power of compound interest and to start getting your hard earned money working for you, you need to choose an investment vehicle that can provide:
* Excellent returns (minumum 5%)
* Frequent Compounding (at least monthly)
* Low Risk with High Winning Percentage (90% or more)
* Allows you to withdraw whenever you want (stop anytime - liquidity)
Start having your dollar work harder with compound interest and financial freedom is really not far away.
About the Author
CASHFLOW AVENUE is established to provide Low-Risk Options Trading Recommendations to the common traders in their pursuit of financial freedom and a better lifestyle. http://www.cashflowavenue.com
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Google Finance Launches : Track Stocks, Mutual Funds & Companies |
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2 answers - what are the difference between individual stocks , mutual funds and ETFs? which one is better for investment ? |
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Petition Spot :: View Forum - Investing: Stocks, Mutual Funds |
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Stocks/Mutual Funds - Gospel for Asia |
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