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The Retirement Gamble

Click here to launch PBS’s recent feature entitled The Retirement Gamble and watch the Wall Street executives squirm as they attempt to defend their usury fees and expenses.

Further corroboration that investors are better off ignoring the hype of “active investing” and investing in Index or Index-like, No-Load investments. Curious about the how actively managed investments have performed compared with passive, over the last 10 years?
Click here for the report.

Money CAN Grow On Trees–The Power of Compounding

The rich seem to keep getting richer without having to work harder than anyone else. But just how do they do that? One of the secrets the wealthy use to create more wealth is to invest their money wisely. In fact, they even earn more money from the interest on the money they’ve invested. Surprise! Money can grow on trees after all.  You can do the same with your money by depositing it into accounts that pay compound interest.

Let’s begin by looking at how basic interest works:

  • Basic interest is paid on the initial amount deposited into your account.
  • Even when interest is applied and the amount in your account grows, the interest is still only applied on the principal – the amount without the interest.
  • You won’t earn a lot this way because you’re only earning interest on the principal amount.

It is much smarter to put your money in an account that pays compound interest. This is where you can really watch your money grow, and make more money from your initial deposit.

Your Chief Financial Navigator:

Debra L. Morrison

About Debra L. Morrison

Debra draws on her four decades of financial expertise, including her  Master’s Degree in Retirement Planning where she partnered with clients to chart their financial plan, and managed their assets accordingly on a Fee-Only Fiduciary basis. She holds the Accredited Estate Planner designation which armed her with specialty knowledge that helped her clients and their families KEEP more of their hard-earned estates, leaving rich legacies.

She has since retired from active financial planning and asset management and now serves as the Founder and Chief Navigating Officer of Women Navigating Finances.

Yes, she’s equally passionate about alerting women to pitfalls to avoid as well as charting, and then navigating each woman’s finances.

She strategizes with her growing number of coaching clients to either accumulate maximum wealth or, once retired, enjoy an inflation-adjusted lifetime income stream so that they can still afford to buy higher priced goods and services as they age.  Together, Debra and each client, discuss both how to avoid financial perils while at the same time, effectively managing the sequence of return risk as well as the challenges inherent in increased longevity.

Here is how compound interest works:

  • Compound interest is basically interest that is collected on the original amount you depositedplus the interestthat has already been applied to that amount.
  • Whenever interest is applied, the amount of interest is added to the principal for the next time interest is applied.
  • Unlike basic interest that is applied only to the principal,compound interest is paid on the entire amountin the account, not just the principal.
  • Your money can earn more in a compound interest account than in other types of accounts because you’re earning interest on a greater amount of money each time the interest is compounded.

DOUBLING YOUR MONEY

You can find out how long it will take your money to double in a compound interest account by applying a very simple calculation:

Take the interest rate you’re earning for your money and divide it into 72.

For example, if you’re earning four percent interest, you would divide four into 72 and learn that it will take 18 years to double your money. If your money is in an account that pays six percent compound interest, it would take 12 years to double your money.

These examples illustrate how your money will be compounded on an annual basis. Some financial institutions will compound your interest on a more frequent basis, such as quarterly or monthly. Some even compound it daily.

Investing your money in an account that will earn compound interest is a wealth-generating secret you can’t afford to neglect. There is no easier way to increase your wealth than just investing your money and watching it grow.

2 Responses to Compound Interest 

Dotty says:
October 18, 2011 at 10:55 am

Can these compounding accounts be found at any bank? Do they have a special name so we know what to look for?

Betty says:
October 20, 2011 at 11:11 pm

Yes indeed, banks will have each of the compound rates available and posted:
Daily
Monthly
Annually
at least, and often times more time periods than that as well. If it is not posted, ask your bank for this information.
God Speed.

What Others Are Saying:

"Just one tip from Debra and I immediately found $180 per month!" ~ Ruth

"Having Debra's coaching prowess, honed over 42 yrs. as a financial planner, is invaluable. I love being able to ask her questions about my specific situation." ~ Trish

"Debra is filled with great information that helps me navigate the complex financial world. She's sassy, she's fun, she's funny. My only wish is I had met her sooner!" ~ Charli

Sarah after Camp Widow Presentation and Workshops (2015)

Elizabeth Streb, Renowned Performance Artist & 2013 Recipient of Doris Duke Artist Award & MacArthur "Genius" Award-winner.

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Contact: Team@WomenNavigatingFinances.com
or Call 973-706-8924

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