The next key towards your financial freedom will depend on how you use time. Time combined with rate of return and consistency, is a powerful key to achieving financial freedom. Time can make a disastrous financial system right. It pays to start investing early. When you’re young you can save small amounts, verses waiting to save at which time you will have to save more. Time can be your best friend or your worst enemy. Look at the parents who deposited money at their child’s birth. Look at the end result if they had waited to save until their child was 16 years old; or until their child was 40 years old.
Add Consistency to Time:
If you do not have a lump sum to start investing with, then invest smaller amounts on a consistent basis.
The Power of Compound Interest:
Compound interest is one of the most powerful ways to wealth. Here’s how it works (based on a $1,000 deposit):
Year 1 6% interest = $ 1,062
Year 2 6% interest = $ 1,128
Year 65 6% interest = $48,925
Just A Little More Grows Even Faster:
If you were to save $80 more a month, than the $20 you normally save, over 40 years you would save $600,000 more.
The Importance of Rate of Return:
The interest rate, also known, as the rate of return, is critical to building your financial wealth. For example, if you invested $1,000 over a period of 65 years, your investment would be based upon the rate of return. For example:
6% rate of return 65 years = $ 48,900
9% rate of return 65 years = $ 339,700
12% rate of return 65 years = $2,347,800
It’s obvious why the rate of return on your savings will have a profound impact on your financial security. You can accumulate cash in your savings in two ways: 1) save more money and accept a lower rate of return or 2) save less at a higher rate of return.
"Today is the First day of the rest of your life" what are you doing to do with it?
Be sure to take time and visit Solongbills.com - a website all about creating a financial plan to help you create a debt payoff plan and eliminate debt forever.
The Rapid Debt Reducer website - Debt software to organize and create an action plan to eliminate debt with easy. You owe it to yourself to save as much as possible.
Gene Jolley's website - On my personal website I show people how to save money and make money. You will also be able to get to all of my websites from this one site
Kingdom Financial Principles - Christian financial principles to help you live by Faith, and trust God for your financial resources. A ministry of Bible Baptist Church in Berlin Vermont.
Wednesday, July 16, 2008
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