Nowadays, we often need to spend money to enjoy nice thing. However, the very nice ‘compounding interest’ is something that we need not buy. Instead, we are rewarded. All we need to do is delaying gratification and put the money to work.
Time is Money!
‘Time is money’ is not only applicable to our daily lives, office work, it also applies to our hard earned saving. People had been busy with their daily work, so more often than not they forgot to let their money work harder for them at the same time.
Procrastination Hurts!
Compounding interest is so simple to understand yet the most easily neglected aspect of financial plan of an individual. People know the power of compounding interest, but the discipline, emotion, procrastination often make people delay taking action or taking no action at all.
Have You Taken Action?
If you have realised the importance and already taken action, congratulations to you! If you have realised but not yet taken action, please act now before it is too late. If you have not realised the importance, I will share more how powerful it can be.
Example
For illustration purpose, if John saves and invests regularly $1,000 per months for the next 30 years, and if he manages to achieve 10% p.a compounding return, John’s wealth would reach $2.26 Million after 30 years. 6 times more than what he saves! The table below illustrates the total wealth he can achieve based on different annual investment return.
Conclusion
To achieve financial freedom, making saving / money work harder for us rather than the other way round is probably the best solution.
