How can you make your money grow over a period of time?
Invest as early as possible is the mantra for long time success and wealth making.
In the land of money when two people A and B are taken into contrast. The story illustrates one of the most powerful concepts in the world of money ------Compound Interest-----. One man B even though he saves huge amounts of money for a longer period of time period, still loses out to another man A. The secret of it is compound interest. Over short periods of time, the compounding effect is not all that prominent, but over a longer time frame, the results are spectacular
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Let us go back to the story of two people once again. One man A saves Rs 1,000 every year for the first ten years. After that he saves nothing. However he compounds his money at the rate of 15 percent for 30 years. Other man B starts at year 11 and keeps saving Rs 2,000 every year for the next 20 years. Like A, he too compounds his savings at 15 percent every year. Let’s tally the score at the end of 30 years. B makes a respectable Rs 2,35,620 whereas A makes Rs 3,82,146!
Growing large amounts of money over a long period for which you have to start at an early stage, and starting early is only winning half the battle the second most important thing is that you should compound the money consistently, over a long period of time. If you could do these two things, you are guaranteed to be a very wealthy person over a period of time.
Albert Einstein once called compound Interest as “The eighth wonder” of the world and “The most powerful force” in the world. According to him, he who understands it pays it. Now that you understand how it works, get ready to make it work for you.
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