Watch the video above and talk about it with a group or mentor. Learn more.
Did you know your money can make you money? It’s all due to something called compound interest.
Key Points:
- If you begin investing while you are young you will end up with significantly more money when you retire. This doesn’t mean you have to continually invest year after year, you just have to invest for the first ten or so years and then let compound interest work it’s magic.
- If you start investing each year at age twenty-seven until your retire at age sixty-five you still won’t have as much money at retirement as you would have if you had begun investing earlier in life. This is because your money will have less time to earn compound interest.
- Albert Einstein said, “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.” Those who don’t understand compound interest end up making bad decision with their finances. They will do things like make minimum payments on credit card bills and then they end up having to pay the interest on the interest they already had.
Quote This:
“Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.”- Albert Einstein
Talk About It
- What is your initial reaction to this topic? What jumped out at you?
- Were you taught about compound interest in school? If yes, what did you learn about it?
- Do you think schools should take more time to teach financial planning? Why or why not?
- What are some other aspects of financial planning you wish you would have known at a younger age?
- Have you already begun investing money towards retirement? Why or why not?
- Write a personal action step based on this conversation.
