Wouldn’t it be cool if you had command over your money like a Jedi over the Force? Well, you do. It’s compound interest, what Einstein (supposedly) called “the most powerful force in the universe” – an unseen presence that makes money grow. The power of compound interest can take an investment of $10,000 and multiply it to $100,000 with nothing more than the passage of time.
In the accompanying infographic, the Wherewithal team shows you how even a modest contribution can multiply over time. Add a small monthly contribution to the mix and you can see how the power of compound interest can lift your financial goals to new heights.
But like The Force, the power of compound interest has its Dark Side. While they may offer a short-term solution to financial strain, credit cards and consumer loans can rack up consumer debt and choke off your savings at an alarming rate.
Here are some key takeaways about compound interest to keep in mind:
- With compound interest, time is your ally. [tweet this]
- Assuming an 8% annual return, a $10k investment can double in 10 years. [tweet this]
- Procrastination is your worst enemy for long-term gains. [tweet this]
- Small contributions to your savings can pay big dividends over time. [tweet this]
- Daily compounding interest is what makes credit cards so hard to pay off. [tweet this]
- Average household credit card debt is nearly $16k. [tweet this]
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