Small Biz Millionaire Ep. 11: Compound Interest

Today I want to talk about compound interest, because I ask people all the time, I say
you know what compound interest is? They have no idea.
One thing that you need to understand about compound interest, when you put money into a bank that pays compound interest. You make money on the interest- they roll the dividends back into your account, and not only are you making money on the principal, but you're making money on the interest.
People who understand it make money on their principal and they make money on their interest.
And that's how you become wealthy.
Those who don't understand compound interest will become poor.
They don't understand it, and it helps lead you to poverty.
I recommend getting a 15-year mortgage, even if you have to struggle a little bit, and try not to pay more than 20% of your income towards your mortgage payment.
Because if you actually look at the amortization chart for 15 year versus 30 year, you're going to pay almost double.
So you always want to pay your home off as quick as possible, because of the compound interest.
And you want a home, because it's another way of saving money.
What you want to do is save it and put it into an investment account. You need to not live frugally,
but you need to live more intentionally with your money.
I even wrote that down, you must be intentional with your money. You must really think about what you're buying and what you're doing.
Compound interest can be an ally if you understand how to use it, but you have got to have,
I'm going to use the term “friction points” or “red flags” when you're out there and you're buying something or you see something you want, you got to stop. You’ve got to get a control over that emotion.
Assets like a house, an asset puts money in your pocket, a liability takes money out of your pocket.
You need to think about your retirement because nowadays we're not living to just 70. I always tell people, whatever your income is, if it’s $50,000, $30,000 $100,000, you want it
12 and 1/2 times in retirement of what you live for a year.
That way when you put that into a mutual funds or into a house with assets, you will have money to live off of.
The best time to invest in the stock market is now . The best time to invest in real estate is now. You just got to do it, okay.
The key point I'm making here, compound interest, if you make it work for you, there is absolutely no reason on this earth why each and every one of you that's watching this video,
cannot be a millionaire.
I strongly suggest Monday, Tuesday, whenever you've got a spare moment, I want you to call a broker and I want you to start. Speak with somebody and ask them what they do, how they form their money, and I'm going to tell you what I do.
I use growth, growth in income, aggressive growth, and global.
With global you get some American companies still, but if you put your money in those four categories, you'll be fine.
I hope this video really helps today,
I really just want to see everybody be successful.
I love success stories. I really do.
If you like this video, please share, please subscribe,
and please comment, thank you so much.
Have a great day.
David

[@jamessalvia4839]

I thought I saw this guy on an a-c recharge video. Didn't know he was a professor of finance. Wow

[@lencicero9630]

David; do you have an email address? Also do you have an HVAC apprentice employee review /evaluation sheet? Thank you for all you have done for all of us small business owners!!!

[@danwittels5542]

If your in your late teens or early 20's and you start a Roth IRA and depot $50 or $100 a week, 60 year old you will be very, very happy you did. The time goes by quick, trust me.

[@joffrecueva5662]

Put it into a madoff account 😁