November 2015
Beginner
176 pages
2h 44m
English
Content preview from Money Mindset
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O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.
Chapter 5 The Power of Compound Interest and the Erosive Effect of Inflation
So far in Money Mindset I have stressed the importance of having a plan to accomplish your financial goals. After you determine your goals and construct your plan, the wealth management process begins to unfold. There is a lot to learn and digest about the process, and in upcoming chapters I will break down for you the impact of taxes and asset allocation, how to evaluate your risk tolerance and build an investment portfolio, and finally, how to monitor your portfolio and rebalance it when needed.
But first, this chapter discusses the power of compound interest and the erosive effect of inflation. Remember, you need to have the right financial mindset in order to meet your goals and have your investments live up to their full potential.
The Power of Compound Interest
Albert Einstein, a Noble Prize Laureate in physics who studied the biggest mysteries of our universe, said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
Let’s explore the power of compounding by learning the mathematical Rule of 72.
The Rule of 72 is a simplified way to estimate how long an investment will take to double, given a fixed annual rate of interest. By dividing 72 by the annual rate of return, you can get a rough estimate of how many years it will take for the initial investment to duplicate itself. For example, the rule of 72 states that if a $100,000 ...
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O’Reilly covers everything we've got, with content to help us build a world-class technology community, upgrade the capabilities and competencies of our teams, and improve overall team performance as well as their engagement.Julian F.
I wanted to learn C and C++, but it didn't click for me until I picked up an O'Reilly book. When I went on the O’Reilly platform, I was astonished to find all the books there, plus live events and sandboxes so you could play around with the technology.Addison B.
I’ve been on the O’Reilly platform for more than eight years. I use a couple of learning platforms, but I'm on O'Reilly more than anybody else. When you're there, you start learning. I'm never disappointed.Amir M.
I'm always learning. So when I got on to O'Reilly, I was like a kid in a candy store. There are playlists. There are answers. There's on-demand training. It's worth its weight in gold, in terms of what it allows me to do.