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Mandy Money

Mandy Money

compound savings

Getting rich quick is the dream, sure. But unless you’ve got that killer idea it can be pretty difficult. Fortunately, though, getting rich slowly is a little easier than you may think… 

Thanks to the power of compound returns, if you:

1. Save $500 every month from the age of 25

2. Invest those savings for an 8% annual return

By the time you are 65 your savings will be worth $1.76m!

But $500 a month for 40 years is $240k – a far fetch from $1.76m. So how does this work?

Dammit mandy, you are making me too darn educated.

Compound returns are achieved when you reinvest the profit you make on your investments…

So that money earns you an additional return!

Umm… can you give me an example?

Let us take the first year, where you save $6,000 (12 months x $500) and invest it.

If that money returns 8% over that year – a tidy $480 – you have the potential to reinvest $6,480 on top of the extra $6,000 you saved throughout that year.

After another year of returns, that $12,480 becomes $13,478 and you my friend have begun the fantastic wealth accumulation cycle.

Does this cycle pick up speed?

Ooft, great question.

Yes, yes it does.

The beautiful thing about this compound return process is that the bigger the savings pile, the bigger the additional return, the faster your wealth grows. This beautiful cycle will continue to pick up speed.

For more ways to get rich (slow), check out these:

how to generate 8% returns

2 ways to make your money grow

an essential post for generating those 8% returns
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save some money on super

super quick, super tips

another way to help grow that retirement nest egg
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buying shares baby

how to buy shares

an easy 101 for entering into the sharemarket
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