Time and Compound Interest

  • The other day we had a discussion here in the office. A recent podcast introduced the topic. What would happen if you applied the principles of compound interest to your time?

     

    Compound interest (in case you haven't studied it) is when the interest that your savings/investments earned is added to the principal and earns interest itself later. That has the effect of causing your savings/investments to grow at an ever faster rate.

     

    What would happen if you did that with your time? In other words, what would happen if you spent a few minutes each week on your financial affairs. Maybe just one hour a week on a part-time at-home job and you set that money aside in a savings account?

     

    I did a little math and it's surprising how quickly it would add up. If you earned and saved/invested just $10 a week and it earned just 4% in 10 years, you'd have nearly $7,300!

     

    Could you earn/save $10 a week in one hour? It certainly seems that it's possible. And no matter how busy you are, it's possible to find one hour a week if the results are really important to you.

     

    Have I motivated you?

     

    If so, and you'd like to learn about compound interest, I wrote an article explaining how it works: 10 Things You Need to Know About Compound Interest.

     

    We also have a whole section of the TDS library with a variety of ideas for saving money. Many can be done in just a matter of a few minutes!

     

    Keep on Stretching those compounding minutes and Dollars!


    Gary


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