How To Make Your Money Grow Part 2: Save Early

how to make your money grow

save early and make your money growA friend of mine recently mentioned that he’s saved over 6 figures in retirement funds. No, he wasn’t born into money. He wasn’t given a handout. He’s not part of the 1%. He’s not a lawyer or a doctor either. What he did is something any of us can do. He started saving early, even if the amount seemed insignificant. This is quite the feat he accomplished by 30 years old considering he graduated college with only a dream and “promise” of a career, and nothing in the bank. In fact, his first week in San Diego he was greeted with someone stealing his motorcycle.

The biggest catch to compounding interest is that the earlier you start the more years your interest compounds and the more you have saved in the end.

Fact 1) You must save early and understand how compounding interest works. Once you understand you will feel compelled to start saving now.

Fact 2) We can all save early. You don’ t have to be part of the 1%. Fact 1 applies to all of us.

Fact 3) If you save early and invest wisely you have a higher chance of a comfortable retirement. If you’re a beginner to investing do not worry. We were all at one time right where you are at.

Fact 4) If you invest wisely, save early and the economy hits a recession you have a better chance of a comfortable retirement. One of the ways to do this is to balance your portfolio.

Fact 5) Educate Yourself. When you hit your golden years an excuse like, “I didn’t know”, isn’t going to fly and it certainly won’t help. Learning isn’t as tough and formidable as you might be thinking. It’s like riding a bike. Once you get it it all makes sense.

Fact 6) Certified Financial Advisers can help. Not all of them are greedy and not all of them work on wall street. For the Average Joe investing and saving for our golden years is foreign knowledge to us. We need to take classes…that aren’t offered. We need advise and that’s why they’re here to help. We all need to educate ourselves and part of that comes from asking the experts.

Fact 7) Investing doesn’t have to be expensive. I have a ROTH IRA through my bank and I balance my portfolio with Index Funds and Stocks. If your bank doesn’t offer this you can also Get 100 Commission-Free Trades at OptionsHouse.com!

Fact 8) You have to be disciplined and stick to the plan. Compounding interest requires that you put aside a certain amount on time and leave it there – it’s not an emergency fund.

Fact 9) Compounding interest works when you save early! Check out our free financial calculators and see for yourself.

Albert Einstein called compounding interest, “The greatest mathematical discovery of all time”.

Fact 10) The Oracle of Omaha, Warren Buffet, is one of the wealthiest men in the world and he used compounding interest to amass his fortune. In 1955 he only had $9800. Now he’s worth over 45 billion US dollars.

Warren Buffet told his wife, “Compounding interest guarantees I’m going to get rich.”

Here are more wise words and quotes from Warren Buffet.

The big kept secret for us to save early is that we forget how powerful compounding interest really is.

Here’s a quick example of how compounding interest works:

First year: $1200 ($100 month) x 7% = $84 in interest

Second year: $1284 (1st yr) + $1200 (2nd yr) x 7% = $173.88

After 2 years you’ll have $2657.88 total. But you only put in $2400. After 30 years you’ll have $121,287 when you only put in $36000.

Is that crazy or what?! Well, it works! So start making compound interest work for you. Save now and save early!