Hello,

Today I would like to mention something that is taken for granted or rather many people don’t seem to appreciate the benefit it can have on YOUR income growth. I’m sure we have all heard of compound interest, but do YOU know the effect it can have on YOUR income or investments, especially if YOU are thinking long-term. It’s so remarkable that Albert Einstein called it the 8th wonder of the world. Last time, I mentioned the benefit of starting to save on YOUR  retirement early, that is at the age of 25, the beauty of compound interest is actually felt after the first 6 years of your plan, so that’s why I said it’s benefits can only be felt by a person who is thinking long-term. This is because from the second year YOU will start earning interest on the principal amount plus last year’s interest, for example, for person who is saving lets say $1000 a year and gets an interest of 10% every year, the first year income will be $1000 plus $100($1000*10%), the second year income will be $1100 plus $110($1100*10%) and so on, so that by the time 6 years are over, that’s when YOU start seeing compound interest working. For a person who is saving a portion of their income for retirement financing, and since YOU probably set a date of roughly 20 years from now, by the time the 20 year period is over, in most cases you’ll find a lot of individuals have accumulated enough capital to sustain their current lifestyle. This is why financial experts keep advising people to start on their retirement as soon as YOU start working, as this is the income that will replace YOUR employment income or any other income stream YOU have, and as YOUR income increases so will YOUR interest earned on that income.