“Your Profit will Profit”
The above table speaks for itself, if you invest R2 000 a month in a savings account at a bank, in 40 years you will have just about a million rands in your bank account give or take a couple of cents missing. But if you genius and take the compound interest route, say the stock market grows at an average 20% per year and we assume it stays constant for 40 years on a straight line, your final investment balance at the end of the 40 year investment period will be R335 million. The difference between interest and no interest is therefore R334 million. Now flip the coin and imagine how much one pays on credit card interest given the 21% interest rate charged.
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” Einstein
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Article by kagiso Maloma
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Nice article. Which avenues allow for compounded interest? I have been saving money with the likes of banks and like you said there’s no growth what’s over on my money. What should I be investing for e.g? And would you suggest I take my current savings with to the compounding route or should I start afresh?
Thanks.