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Month: February 2018

Saddle Up, Rodeo Cowboy: Time To Master Your Money Bronco

Saddle Up, Rodeo Cowboy: Time To Master Your Money Bronco

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You need to saddle up and master your money like this rodeo cowboy has mastered the art of riding a bucking bronco.
 Photo by gay2016, CC0 1.0 license

To date we’ve examined the elite annual income of the average American, the monumental impact of simply being intentional with your money, and the phenomenal power of compound interest.

Now comes the fun part – it’s time to start putting all of this new-found knowledge to work.

I’ve been letting you off easy in terms of practical application of the topics covered so far. But like a rodeo cowboy fast losing his grip, that’s all about to change in the blink of an eye because it’s time to saddle up and master your money bronco.

Are you up to the challenge?

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Compound Interest, Part 5: Benjamin Franklin’s 200-Year Experiment

Compound Interest, Part 5: Benjamin Franklin’s 200-Year Experiment

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Benjamin Franklin experimented with many things, including the power of compound interest. Pictured, Franklin's Electrostatic Machine, an invention which led to his creation of the lightning rod.
An electrostatic machine, a personal invention used by Benjamin Franklin to experiment with electrical phenomena, contributing to his creation of another invention still in use today –  the lightning rod.
“Independence National Park” by Peter Miller, CC BY-NC-ND 2.0 license 

This is the fifth and final installment of a series on compound interest and the impact it can have to both speed and sabotage your journey to financial freedom.

In part four of this series, we reviewed how the power of compound interest creates a hidden, deadly cost of debt in the form of opportunity cost, which can effectively double the interest you pay on your credit card and easily triple the original cost of a mortgage. Continue Reading

Compound Interest, Part 4: The Hidden Opportunity Cost Of Debt

Compound Interest, Part 4: The Hidden Opportunity Cost Of Debt

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A well-camouflaged owl, illustrating the hidden and hard-to-spot nature of the opportunity cost of debt.
A well-camouflaged owl, one of nature’s most seldom-seen, stealthy, and deadly predators.
Photo by Kdsphotos, CC0 1.0 license

This is the fourth installment of a 5-part series examining the massive impact compound interest can have on your journey to financial freedom.

Previously in the series we introduced the phenomenon of compound interest, explored how it can serve as a rocket to riches capable of powering us through the millionaire barrier, and discovered how it can serve as the best double agent the world has ever seen.

By now you should be familiar with how to calculate the total amount of interest incurred over the life of a loan when you purchase something on credit, whether that be in the form of a credit card, auto loan, student loan, or a mortgage. Continue Reading

Compound Interest, Part 3: History’s Best Double Agent

Compound Interest, Part 3: History’s Best Double Agent

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Black and white outline of tuxedo, drawing a parallel between double agents such as James Bond and compound interest working against you.
Photo by Tom Woodward, CC BY-SA 2.0 license

This is the third installment of a 5-part series examining the massive impact compound interest can have on your journey to financial freedom.

In part two of this series we reviewed how the power of compounding accelerates over time and can serve as your rocket to riches, making it possible to break the sound millionaire barrier by simply saving and investing $46.00/week over a period of 50 years.

In today’s article we’ll be detailing how compound interest can actually work AGAINST you by going undercover and acting as a double agent to thwart your financial goals.

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Compound Interest, Part 2: Your Rocket To Riches

Compound Interest, Part 2: Your Rocket To Riches

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A rocket pictured mid-launch, demonstrating the acceleration and sheer power of compound interest.
The 9/27/2007 launch of NASA’s Dawn spacecraft via a Delta II-Heavy rocket, the most powerful in its class. “Dawn Begins Its Journey” by NASA / Sandra Joseph & Rafael Hernandez via pingnews.com, Public Domain license

This is the second installment of a 5-part series examining the massive impact compound interest can have on your journey to financial freedom.

In part one of this series, we reviewed the phenomenal nature of compound interest, its life-changing potential, and a basic illustration of how it actually works.

Today’s article will illustrate how compound interest can become a rocket capable of breaking the sound millionaire barrier and launching your financial freedom into orbit.

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Compound Interest, Part 1: A Powerful Phenomenon

Compound Interest, Part 1: A Powerful Phenomenon

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The Northern Lights, illustrating the phenomenon that is the power of compound interest.
Another phenomenon – Aurora Borealis, also known as The Northern Lights.
“YUCH Northern Lights” by NPS / S. Tevebaugh, Public Domain license

You may view the concept of compound interest as simply a boring financial term that you (fortunately) only have to deal with a few times in your life, such as while applying for a credit card or slogging through mortgage origination paperwork.

But if you’re reading this article, it’s probably safe to assume that you’re interested in either ending the stranglehold your finances have you in, increasing your bottom line, or becoming independent of a paycheck. Maybe even all three.

If that’s the case, we need to revisit this concept of compound interest. It is one of the most powerful forces in the universe, and it has the potential to change your life. Continue Reading