Do you understand how compound interest works?
Do you realise that if you saved $1 a day at 10% interest (I know, you wouldn’t get that today), for 40 years you would have $195,577.67. But 
that is only $365 a year I am putting in. You think, ‘how can it come to that amount?’ Well, that is what compound interest is all about. Each day you are adding your $1, but the bank is adding their 10% and it keeps building and building and amassing wealth as it goes.
Now, just imagine if you were putting $5 a day aside for 40 years and 81 days at 10%, that would be $1,000,517.60 amassed over that time.**
Sounds fantastic doesn’t it.
BUT, the simple matter of the fact is though, that if you invest your money in property you will get infinitely more than a return of 10% over the same period of time.
As time goes buy and your property increases in value you will be able to purchase again and again. That is how you can use the compound theory with your property investing. The more properties you have (and given that the market is moving upwards) then the sooner you will be able to add to your investment portfolio.
I am not suggesting here that you go rushing out to buy, but showing you how the compound affects work for you when adding to your investments.
Investments of all sorts have their ups and downs, boom and bust times and what we have been experiencing is nothing really new.
** calculations taken from Jamie McIntyre’s 21st Century Academy 5 Year Homestudy presentation
Filed Under: Investment Strategies • Property Investment
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