The Rich Get Richer With Compound Interest

The rich are getting richer. It’s always been that way. Do you know why that’s the case or how they do it? It’s something you may have heard before: compound interest. This is a secret that the wealthy use to create more wealth. It’s amazingly simple. The only way you can implement this method is to be rich in the first place though.

Through the act of investing, the rich can earn money from the interest their money has already earned them. It’s as if money is growing on trees for them. It’s that easy. How much work is involved? None. That’s right, the rich get richer by doing absolutely no work.

You can take note of this method and use it to your own advantage. Sure, you might not have millions of dollars to play with, but compound interest works with any amount of money. Let me explain how interest works.

When you put money into an account (bank or investment account) it will earn interest. So $1,000 will end up making you $1,100 after 1 year let’s say. Next year you’d expect to make another $200 on your money but you’d be wrong. Because of compound interest you’ll be earning interest in year #2 on both your $1,000 investment and your $100 interest earnings. This means that you’ll make more than $100 in year #2. When your interest is earning interest, that’s known as compounding and that’s where the money is.

It’s amazing how money can grow through the years if you just put the money away into an investment account or your retirement account. The key, however, the earning big money with compound interest is to start early and always put money away from every single paycheck. If you do that you’ll find that you can double your money in as little as 10 years.

If you set money aside in an interest earning account you are going to see for yourself how this wealth building secret really works. It’s a method that you should not ignore and if you do it you’ll find it will be the easiest money you’ve ever made.

Edwin C

Edwin is a marketer, social media influencer and head writer here at Money Debate. He manages a large network of high quality finance blogs and social media accounts. You can connect with him via email here.

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