Compound Interest: Your Secret Weapon to Building Wealth
Building wealth is easier when you have time on your side. Time allows you to leverage compound interest.
Listen in as Xavier Angel, CFP® and Erik Garcia, CFP® introduce you to your secret weapon to wealth building.
Episode Highlights:
- Erik talks about the current state of the stock market and mentions that it is common for a market to lose 10% of its value per year. (3:46)
- Erik differentiates between two types of interest: simple interest and compound interest. (7:46)
- Erik and Xavier discuss the rule of 72 and how it helps you understand how long it will take to get a return on your investment. (14:58)
- Erik mentions compound interest as a powerful tool for building wealth. (17:42)
- Erik explains why people should begin investing now. (18:12)
- Erik explains that investing on a regular basis, putting money into an account that earns interest on a constant basis, is a great way to get started. (19:26)
- Erik mentions that investing gives you the ability to capitalize on opportunities when they arise. (20:18)
- Xavier shares that he is advising his children to start investing now. (22:39)
- Erik and Xavier emphasize the importance of patience because compounding takes time. (24:11)
Key Quotes:
- “Compounding is a function of time and return. And time is a diminishing resource, you’ll never get it back. So the sooner you start, the better off you’re going to be.” – Erik Garcia, CFP®
- “You don’t have to start with a lump sum of money. But if you’re investing regularly, putting money into an account that’s earning interest on a consistent basis, that’s a really good way to get started.” – Erik Garcia, CFP®
- “If you put off investing for a later date, you’re not going to have what you could if you begin today. So rethink your strategy and begin saving now. Start today.” – Xavier Angel, CFP®
