The following is a guest post about compound interest by Brent Kesler, author of the book, Mapping Out the Millionaire Mystery: Step Into the Secrets of the Wealthy Money and founder of the Multiplier Method www.themoneymultiplier.com. If you’d like to submit a guest post to Money Q&A, be sure to check out our guest posting guidelines.
Would you rather have a million dollars OR the sum of a penny doubled every day for 30 days? A million bucks sure sounds pretty good, doesn’t it?
But just to be sure, let’s do the math. One penny doubled every day for 30 days makes you over $5 million! Even though it takes that penny 28 days to reach above $1 million, after you hit that $1 million mark, the value skyrockets every day henceforth.
So, what will you have in 60 days? What about 6 months? Now, you’re starting to see the value of what we call uninterrupted compound interest.
Fees
But let’s throw a wrench in your plans and tack on a 2% fee. You may think, “Oh, 2% isn’t bad.” But if you do the math, that 2% fee costs you over $2 million in the course of 30 days.
Instead of earning over $5 million, we are now down to earning just shy of $3 million. Many investments you make, or qualified plans you have, contain fees like this with the same dire consequences to your money.
Control
Let’s piggyback off of fees in your investments or qualified plans. Who’s in control of your money? You or someone else?
Withdrawals
Let’s take a look at another financial obstacle most people face every day with little awareness that it actually is a financial obstacle – withdrawals. Most of us will need to pull out some of that money before day 30.
So, on day 15 you withdraw $100. Then, on day 25 you make another $100 withdraw. That’s only $200. No big deal, right?
Well, after doing the math, you’ll discover that withdrawing that $200 actually costs you over $3 million. That’s right, your initial earnings of $5 million dollars were reduced by over $3 million simply by taking out $200 over the course of 30 days.
Did you know your withdrawals were costing you so much?
Taxes
The fourth silent financial killer is taxes. Now, let’s say your money was taxed at 15% over the course of that 30-day period. You’ll see by the end of that 30 days you have only paid $182,000 in taxes. BUT because that money wasn’t there to grow by doubling, that tax actually caused a loss of over $4.8 million, leaving you with only $559,000.
These fees, lack of control, withdrawals, and taxes, even if they seem relatively “low,” are costing you far too much, many times without you even knowing. Why? Because they interrupt your compounding interest.
Of all the systems we use for our finances, uninterrupted compound interest is the least used BUT the most powerful because it allows your money to grow uninterrupted. And this uninterrupted compound interest is what is used by the rich and super-wealthy to keep their money.
The best part about using The Money Multiplier Method is that you don’t have to let your money sit and wait for it to compound, you can still use your money. It’s structured in a way that allows your money to stay in your account, without being interrupted, which makes you more money. This is the true way to grow wealth and everyone, including you, can start right now.
As Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.”
My name is Brent Kesler and I learned of this concept when I was $984,711 in third-party debt. By implementing The Money Multiplier Method, I was about to pay it off in 39 months. I became so passionate about this, that I started teaching others how they can break the bonds of financial slavery they don’t even realize they are in.
You can learn more at www.themoneymultiplier.com. Click on the Resources Tab and watch my Presentation to see exactly how I paid off that debt and continue to be in control of my hard-earned dollars.
You can reach Brent Kesler at (785) 248-9637, brent@themoneymultiplier.com, or www.themoneymultiplier.com