Most people have heard of compound interest.
Investopedia defines it as:
Compound interest is interest calculated on the
initial principal and also on the accumulated interest of previous periods
of a deposit or loan.
In other words, you get interest… on interest!
The Power of Compound Interest
The Power of Compound Interest is that it
accelerates your savings. It’s a great
way to put your money to work and watch it grow. When you earn interest on
savings, that interest then earns interest on itself and this
amount is compounded monthly. The higher interest, the more your
money grows!
This chart shows the different returns depending on when the
individual started to save. The difference between the red and blue lines is
staggering. “Susan” (in blue) invests for only 10 years early in her career,
ends up with more wealth than another saver “Bill” (in red), who saves for 30
years later in life.
Source: Business Insider
This difference is, of course impressive if one has the
foresight to start saving in their twenties and thirties. For a lot of people
that just wasn’t an option. Student debt or starting a family is often a
priority for young adults. Saving takes a back seat. A lot of people decide
that they will “make it up later” or do it when they “earn more when they get
that promotion.”
From the example it is apparent that it is very difficult, if
not impossible to make up for the delay. This leaves a lot of people frustrated
in their mid-years and even fearful as they approach retirement.
While saving a modest amount early in life is probably the
best approach, it is not the only way to save for retirement.
It is possible to “make up the difference” later in life, but
not by throwing money at a savings account. With current interest rates, this
will be about as effective as stuffing money under a mattress!
Another way to accelerate savings for retirement is to
leverage available funds. Safe and secure investment opportunities that are
backed by real assets and provide a significant return on a monthly basis can rapidly
make up for an under-funded retirement account. By investing in tangible assets,
these investments are not subject to Wall Street’s volatility. Returns over 5%
are not uncommon, and real assets provide many additional benefits for the investor.
With these higher returns on secured investments it is possible to quickly make up for a late start in retirement preparation. By diversifying the portfolio, multiple income streams rapidly accelerate retirement accounts. In fact with a few well placed investments, some people find that they can replace their working income and retire early!
With these higher returns on secured investments it is possible to quickly make up for a late start in retirement preparation. By diversifying the portfolio, multiple income streams rapidly accelerate retirement accounts. In fact with a few well placed investments, some people find that they can replace their working income and retire early!
The best way to ensure a comfortable retirement is to leverage funds now. Smart investments now can yield substantial returns.
These steps are good places to start a more conscious and directed route to achieving your financial freedom. Read, reflect and take what will work for you.
Bottom line is that there is no blanket strategy. Each person must evaluate their own circumstances, needs and desires. Get the help you need to achieve financial freedom.
Above all, believe in yourself and believe that you will achieve your goal!
To learn more, contact me to arrange a consultation! :)
Above all, believe in yourself and believe that you will achieve your goal!
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Sources:
Lynda at Sonoran Sun | Private Equity Investments
Sources:
Lynda at Sonoran Sun | Private Equity Investments
