Awesome video! Understanding compounding interest was the reason I got into the FIRE movement in the first place. Keep up the great work - I honestly think this channel will be huge one day.
I think a lot of young people are still scared of investing, and they try to build wealth by just putting money in a savings account. What they don't realize is how much that is costing them in COMPOUND INTEREST! I think walking through the calculation like this makes it much less intimidating and very concrete how someone can use compound interest to build wealth.
Where should I start looking for a high interest secure place to put my money? I'm not scared. Most don't know any better and are slowly learning on their own, like my 24 yr old self.
Hey Andrew, nice video. Nice and simple. I am a big fan of compounding. I like the Warren Buffett quote "My wealth has come from a combination of living in America, some lucky genes, and compound interest,"
If I were investing my first $1,000, I would put it in a Roth IRA account and invest in something basic, like an S&P500 index fund or ETF. Keep it simple and leave it alone!
Thank you Angel!!! And great question. I did make a video on which banks offer the best savings accounts, but when we're talking about compound interest, it's going to be more about long term investments in something like index funds or mutual funds. For starters, I'd recommend looking at opening up a Roth IRA, depositing some cash, and then investing in something like an S&P500 index fund. I made a video about the Roth IRA here that might interest you: ruclips.net/video/SvAlP9oJ9Uo/видео.html
Hi Andrew, Congratulations on another excellent video. Quick question for you, in min @4:49 Why are you saying that only $6.83 was made when the difference between initial investment and final balance was a difference of $126.83? Thank you for your time
so i have a question......if someone was to start a roth ira account with lets say a quarter million.....how accessible is the money? like is it like money that can be accessed at anytime or is it money that once its in there you cant touch it
Great question!!! With a Roth IRA the maximum you can deposit is $6,000 per year. So if you started an account today, the max you could contribute is $6,000. You can access anything you deposit whenever you want. If I deposited $1,000 today and wanted to pull out $900 of it next month, I could do that. You cannot access anything beyond what you deposit, like growth due to investments, until you reach retirement age, 59 and 1/2.
Hey Ryan, thanks for the great question! The answer is yes, and that’s how most people save money for retirement. Add a little bit to their savings every single month, like clockwork.
Hey Lexi, thanks for watching and for this awesome question! Just about any sort of investment can earn compound interest, as long as your earnings on that investment are not withdrawn. Whatever earnings you have, those will start to have some earnings of their own as well, and voila! Compound interest!
this is amazing video over coupon interest that's the power of growing something over. definitelly sub to join this conversation. They say you be a millionaire if you save a 5k into your roth ira for 20 years or so. love it 👍😘😘
Having your money work for you rather than you working for your money is how to win the get rich game. Great explanation, Andrew!
You said it!! Thanks!!
This is literally why I tell everyone to plan for long term but start now!
Preach!!
Awesome video! Understanding compounding interest was the reason I got into the FIRE movement in the first place. Keep up the great work - I honestly think this channel will be huge one day.
Much appreciated Alex!! I think if more people understood the power of compound interest there would be a lot more satisfied retirees!
How can I start an compound interest account? Where do I start?
I think a lot of young people are still scared of investing, and they try to build wealth by just putting money in a savings account. What they don't realize is how much that is costing them in COMPOUND INTEREST!
I think walking through the calculation like this makes it much less intimidating and very concrete how someone can use compound interest to build wealth.
Heck to the yes! More young people need to get a handle on this stuff!!
Where should I start looking for a high interest secure place to put my money? I'm not scared. Most don't know any better and are slowly learning on their own, like my 24 yr old self.
Agreed, compound interest is the magic to accumulate wealth.
Yes!
Hey Andrew, nice video. Nice and simple. I am a big fan of compounding. I like the Warren Buffett quote "My wealth has come from a combination of living in America, some lucky genes, and compound interest,"
Great quote from a great investor!!
great explanation
What do you recommend investing $1000 in to get that ?
If I were investing my first $1,000, I would put it in a Roth IRA account and invest in something basic, like an S&P500 index fund or ETF. Keep it simple and leave it alone!
@@PracticalPersonalFinance that don't sound simple 😭
Great video and topic Andrew 😀 My favorite book on compounding is The Compound Effect by Darren Hardy!
That sounds like a really interesting book, I am going to check it out!!!
Where do I start ?? What kind of account do I need to open for this ?
Andrew great video. So! who offers the best CI? do you have a video on that?
Thank you Angel!!! And great question. I did make a video on which banks offer the best savings accounts, but when we're talking about compound interest, it's going to be more about long term investments in something like index funds or mutual funds. For starters, I'd recommend looking at opening up a Roth IRA, depositing some cash, and then investing in something like an S&P500 index fund. I made a video about the Roth IRA here that might interest you: ruclips.net/video/SvAlP9oJ9Uo/видео.html
Hi Andrew, Congratulations on another excellent video.
Quick question for you, in min @4:49 Why are you saying that only $6.83 was made when the difference between initial investment and final balance was a difference of $126.83?
Thank you for your time
Money makes money makes money makes money that's for sure!
You could say that again! And again!
so i have a question......if someone was to start a roth ira account with lets say a quarter million.....how accessible is the money? like is it like money that can be accessed at anytime or is it money that once its in there you cant touch it
Great question!!! With a Roth IRA the maximum you can deposit is $6,000 per year. So if you started an account today, the max you could contribute is $6,000. You can access anything you deposit whenever you want. If I deposited $1,000 today and wanted to pull out $900 of it next month, I could do that. You cannot access anything beyond what you deposit, like growth due to investments, until you reach retirement age, 59 and 1/2.
Question... can you add more funds to your original investment at a later date or no?
Hey Ryan, thanks for the great question! The answer is yes, and that’s how most people save money for retirement. Add a little bit to their savings every single month, like clockwork.
Great vid, compound is 8th wonder of the world according to einstein!
Sure is!!
How do you find compound interest investments?
Hey Lexi, thanks for watching and for this awesome question! Just about any sort of investment can earn compound interest, as long as your earnings on that investment are not withdrawn. Whatever earnings you have, those will start to have some earnings of their own as well, and voila! Compound interest!
What are some real world scenarios where you find an investment getting 12% that would automatically compound for 30 years though?
this is amazing video over coupon interest that's the power of growing something over. definitelly sub to join this conversation. They say you be a millionaire if you save a 5k into your roth ira for 20 years or so. love it 👍😘😘
If not a millionaire I'm sure that would put you pretty darn close!!
So doesn't this money take a dive when the economy is bad? Why does no one go over that part. The ups and downs of investing ?
People underestimate the power of it!! Start early and you'll thank yourself later
The ultimate parallel to the idea that the best time to plant a tree was 20 years ago, but the second best time is right now!
Those accounts don't exist tho... 12%??
nobody is getting 12% anywhere...
I think I will be dead in 30 yrs.