Compound Interest and Investments

"Described as both a "miracle" and a "wonder," compound interest is simply a function of time." - Coryanne Hicks

This article is one of the most thorough that I've read about compound interest. Before reading my thoughts, take a moment to read over the article linked above.

SOME THOUGHTS

It's amazing the amount of people around the world who don't understand the concept of compounding - or simply were never formally introduced to it. People believe the only way to amass large amounts of savings and investments is through a high paying job or through starting a business.

In reality, you can amass financial wealth through cutting your personal costs and investing the margin (what you bring in vs. what you spend).

There are a lot of people with high-paying jobs who are walking around on "egg shells" since they feel they are one corporate restructuring away from losing their high compensation. This makes a lot of sense - the economy and private sector is moving faster than ever.

I believe the more suitable strategy is to get a comfortable and stable/reliable income and cut costs very carefully and strategically. For some, the way ot do this is to delete your food delivery and takeout apps ($500 a month for some)! Or, sell the car and use public transportation!

HOW SHOULD YOU INVEST?

I understand the trepidation around stocks and investing of so many people. But understanding the inherent risks and amazing upside will guide you along the way.

It's important to also understand the risk of inflation and having your savings lose value when buying goods and services.