Day 5 of 40 Days to Make Your Money Count

The Magic of Compound Interest Money is better than poverty, if only for financial reasons. - Woody Allen The impact of compound interest is perhaps the most significant factor in accumulating wealth. It doesn't take a genius to understand it and use it. For instance, if a 20 year old puts $2000 a year for only 10 years into an IRA at 8% and never puts another dime into it, he'll have over $1 million when he's 65. But if his buddy waits until he's 30 to begin and continues to put $2000 a year into the fund for 35 years until he's 65, he won't catch up to his early-bird friend. In these pages, I've mentioned the advantage of starting to invest regularly as early as possible, preferably in your early 20s. No, it's not convenient, but through the magic of compound interest, it makes a world of difference. And if you're well past that prime period to start this magic, teach this to your kids so they don't miss it. Albert Einstein once said that compound interest, not E=mc2, "is the greatest mathematical discovery of all time." As usual, he's right.

You can listen to Day 5 of 40 Days to Make Your Money Count online on Radio and Podcast. Open the player on this page to stream the available audio.

Day 5 of 40 Days to Make Your Money Count is an episode from Made in Texas by Jim Munchbach, Certified Financial Planner™.

This episode is 12:03 long.

This episode was published on Dec 11, 2018.

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