Everyone says it, start saving your money as soon as possible. Its a fact that the earlier you start, the more you will have later in life.

The best way to get rich quick is by using the power of compound interest.

The logic behind compound interest is very easy.

The process is simply this;
Assuming you put 100 hundred dollars in a bank account and it pays you 5% annually. After 1 year, you would have $105 in the bank account, The second year you would have another 5% interest on that $105. At the end of the second year, you would have $110.25 ( achieved by taking 5% of the original $100 - $5 - plus 5% of the additional $5 – 25c ). By the 3rd year, you would have grown to $115.76, 4th year to $121.55, and so on. In the long term, after 10 years, that same $100 would be worth $162.89. Infact, 20 years later, the money would have grown to $265.33. In 189 years, your little 100 hundred dollars would be worth over $1 million dollars.

I know that becoming a millionaire in 189 years time, is not fun at all. The fun part is the results we can get by twisting some of those numbers, because compound growth is simply exponential growth. Compound interest gains, takes a little time to get going, but once it does … You jaws will drop.

Using the same example, but playing with different numbers. Assuming that, instead of investing just $100, you went and invested $1 a day which equals to $30 per/month. We also assume, you invested all the money in index funds. ( An index fund is the fund that mirrors a market performance: depending on what you choose, you will still own a piece of every stock on the market ). Over the years, this Index funds have grown at 11%. Your invested $30 per month will grow into $1 million in about 53 years. This is definitely better than 189 years. But wait, we are not done yet.

I also know that 53 years is a long time to do this. You want to be a millionaire sooner than that time frame.

How about this: Lets assume that you invest $100 per/month in more aggressive investments portfolios and your returns were 20% annually. At this interest rate, you can become a millionaire in 27 years, which is not bad at all. Now, try $1 thousand per/month, for a return of $1 milion in 14 years. $2 thousand per month for a return of $1 million in 11 years … And so .. on

It is possible. You need time, dedication and focus … Try to cut down on your expenses. Take action and you will see the difference in your life.

Have a good day and remember to stay thinking positive.