Investing Power Compound Interest
$500 per month invested for 20 years is about $430,000.
$500 per month invested for 30 years is about $1,400,000.
$500 per month invested for 40 years, is about $4,300,000.
The power of investing is compound interest. It works best when it has as much time as possible to do its job.
BUT, investing should begin only AFTER all debt is paid off.
I created the 7 Baby Steps in a specific order for a reason. Kicking debt out of your life frees up your largest wealth building tool — your income! If you’ve still got debt hanging around, you’re not going to be able to actually gain traction with your money, because you’re still sending it OUT of your hands each month, with interest. That’s no good. I want YOU to be the person earning the interest through your investments. SO, it’s time to get started…
Baby Step 1 is to save up a starter emergency fund of $1,000. This will keep the small financial hiccups in life from derailing your debt payoff progress.
Baby Step 2 is to pay off all debt (except a mortgage if you have one) by using the Debt Snowball method. This means listing your debts from smallest balance to largest while ignoring the interest rates. Then, focus on putting all extra money in your budget toward the smallest debt while making minimum payments on the other debts. Once that smallest debt is paid off, roll its minimum payment amount and all that extra money each month onto the NEXT smallest debt. Do this over and over until all debts are paid off. This will work a lot faster than you ever thought possible!
Baby Step 3 is to save 3-6 months’ worth of your expenses for a fully funded emergency fund. Add that first $1,000 fund into this one. This will be your real emergency fund that can help you through any of life’s big financial emergencies. That way, you’ll never have to turn to a credit card or a loan again, because the borrower is slave to the lender… and YOU’RE FREE NOW!
Baby Step 4 is to invest 15% of your income for retirement! Now’s the time you get to let your money start working for YOU!
If you’re ready to invest, get a professional on your side to help guide you. I help people with their money every day, and even I consult an investing Pro. Because this isn’t a do-it-yourself project, it’s your hard-earned money doing a BIG job. My team has been matching people with financial advisors and other investing pros for over 20 years, for free.