1 Answers: Compound Interest, Inflation, Investing Success

Question

What is compound interest and apparently it is also negatively affected by inflation? I would like to start my investments while young so I can maximize the return over my lifetime.

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Isaac Mathis 4 months 1 Answer 44 views 0

Answer ( 1 )

  1. If we look at like Albert Einstein …

    One of his most famous quotes from Albert Einstein is that the most powerful force in the universe is compound interest.

    Maybe you’ve heard of this before it’s not necessarily a new concept goes back even before Einstein.

    But he framed it real well.

    Here’s a person who talks about you know the universe and all that and he and he’s saying that compound interest is all powerful and it is and it’s all about that for us the personal investors the folks are investing for maybe retirement financial independence college whatever it might be.

    You know these goals that we have and compounding is what helps us to get there.

    But to take advantage of compounding we got to start.

    Right.

    And the earlier start the bigger the advantage of compounding will be for you and I’ll demonstrate this.

    But I understand that as your investor the compound is going to work for you but also it can work against you because this thing called inflation right.

    Inflation being prices are always going up.

    I mean if you bought a gallon of milk today with a lot lot more expensive you bought a gallon of milk 50 years ago or 50 years before that that’s inflation prices rising so we need our investments to continue to rise faster than inflation and compound at a faster rate too.

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