Want to know how to get rich off compound interest? Well, this should not be the last post about compound interest in InvestmentTotal.com. We all want to be rich, however not all people are getting rich. The reason why rich people are getting richer is because they are taking advantage of “compound interest”. Today, let us assume that you and me wants to become a millionaire in a specific period of time. Say for example, you you want to have one million dollars for your retirement and you still have 30 years preparation.
Let us provide some ideas on how to have extra one million dollars after 30 years. To make that amount of money, you need to invest money. But, how much money to invest per month in order to acquire one million dollars?
Interesting Topic: Will You Use Compound Interest in Stocks, 401k, Loans or Credit Card Debts?
How to Make Money in Compound Interest
The answer is it depends on the real rate of return on your investment. If you properly choose the right investment, your money will grow after 30 years. There are many investment vehicles that can earn at least 10%, 12%, 15% or more. As the old saying goes, great risk means great rewards. How much are you willing to take risk? Are you willing to do whatever it takes to get rich?
I know you are willing to take risk. Do you know that you don’t have to take high risk just to earn your first million dollars? It is true, and that’s the power of compound interest.
Let’s Do the Math in Compound Interest
If you will invest $250 per month (I know you can invest $250 per month), that earns 15% within 30 years, your money will grow to astonishing millions. To be exact, if you invest 250 dollars a month that earn 15% interest within 30 years, your money will grow into $1,304,235.
Related: Formula of Compounding Interest for Your Investments
What investments that earns 15% per year? If you want to invest your money in an investment that earns fifteen percent per year, you might consider investing in stocks and mutual fund equity.
Note: Research and investigate which mutual fund companies that can give your investments a good return. You have to know the best performing mutual funds and stocks. (Another note: Always visit Compound-Interest.Net to learn how to invest in mutual funds and stock market).
As you have notice, compound interest has a big role to make investors rich. Even a small amount of money can turn into millions (that is, if the investors chose the right investment instrument).
That’s how rich people are getting rich. They are investing their money and reinvested their profits. While on the other hand, there are many people who don’t know what is a compound interest all about, but, for sure, they do know why they are drowning in debt through credit cards.
FYI: The compound interest has a good and bad effects in different ways. Good effects for investing and bad effects for borrowing or debts.
So, you better think! Will you use compound interest in investing or in debt such as credit cards and loans? It is your decision, anyway personal finance is still personal. Please share ideas on how to get rich off compound interest using the comment box below!