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The #1 Wealth KILLER

 

Albert Einstein once referred to compound interest as the 8th wonder of the world. Saying he who understands it earns it; he who doesn’t pays it. And he couldn’t have been more right. Today we’re going to be looking at the miracle that is compound interest and how can protect my retirement as it relates to the #1 killer of your wealth. Let’s get started. So the #1 wealth killer is debt. Yeah, I know, big shocker. But it’s really true and today we’re going to look at why that is.

The truth is, having too much debt can put a limit on your greatest wealth-building tool – your income. While it may be tempting to invest rather than pay off your debt, compound interest is a force to be reckoned with. In fact, I recently dedicated an entire video to its power. Financial advisors often use the example of Jane, who invests $100 per month ($1,200 per year) from the age of 18 to 25 and earns an average of 10% per year on her investments. By the time she stops investing at age 25, her nest egg will be worth just over $15,000.

However, before you start investing, it’s important to consider your debt load. Here are some reasons why paying off your debt first may be the smarter choice:

High-interest rates: Many forms of debt, such as credit card debt or personal loans, carry high-interest rates that can negate any potential investment gains.
Risk: Investing always carries some degree of risk, and if you have high levels of debt, taking on additional risk may not be advisable.
Stress: Debt can be a significant source of stress and anxiety, which can have negative impacts on your overall financial well-being.
Freedom: Paying off debt can give you a sense of freedom and control over your financial situation, allowing you to make better long-term decisions.
That being said, paying off debt doesn’t mean you can’t invest at all. Here are some steps you can take to balance debt repayment and investing:

Create a budget: Determine how much money you can allocate towards debt repayment and investing each month.
Focus on high-interest debt: Prioritize paying off high-interest debt first, as this will save you the most money in the long run.
Consider employer-matched retirement accounts: If your employer offers a retirement plan with a matching contribution, take advantage of it. This is essentially free money that can help you save for the future.
Seek professional advice: A financial advisor can help you create a personalized plan that takes your unique financial situation into account.
In conclusion, while compound interest is a powerful tool for building wealth, it’s important to consider your debt load before investing. Paying off high-interest debt should be a priority, but that doesn’t mean you can’t invest at all. By creating a budget, focusing on high-interest debt, taking advantage of employer-matched retirement accounts, and seeking professional advice, you can balance debt repayment and investing to achieve your financial goals.

Over the course of the next 45 years, those investments will continue to grow. Assuming that it continues to grow at an average annualized rate of 10% per year she will end up with $1.1 million in her portfolio at age 70. That’s all achieved with eight years of investing $100 a month. Jane becomes a millionaire by investing $9,600 of her own money. On the other hand, we have John. John doesn’t start investing at age 18. Instead, he starts at the age of 26 (just after Jane had finished all of her investing). He also invests $100 a month. However, unlike Jane, he does it from the age of 26 all the way until the age of 70. John invests $54,000 of his own money over the course of those years and ends up with a nest egg of just under $950,000. So John ends up with approximately $150,000 less than Jane. This is in spite of the fact that he invested six times more of his own money than she did.

It’s no secret that excessive debt can put a damper on your ability to build wealth using your most powerful tool – your income. While the concept of compound interest is widely known to be an effective way to grow your money over time, paying off debt may seem like a counterproductive move. However, it’s important to remember that not all investments are created equal, especially when you’re dealing with debt payments.

Let’s take a look at an example: Jane invests $100 a month for 7 years starting at 18 and ends up with a net worth of $1.1 million at the age of 70. Now, let’s say John starts investing $100 a month at the same age and earns an average of 10% per year, just like Jane. Even if John continues to invest until he’s 100 years old, Jane would still have more money than him, and her lead would only increase with time. In fact, at the age of 100, Jane would have $19.2 million to her name, while John would have $16.7 million. This just goes to show the power of compound interest, as famously called by Albert Einstein as the 8th Wonder of the world.

However, when it comes to investing, it’s important to consider the context of one’s financial situation. Comparing someone who is debt-free to someone who is not will not provide an accurate comparison. While Jane invested $100 a month for 7 years, John was dealing with debt payments and didn’t invest anything for those first 8 years. But what if John managed to free up an extra $200 a year, or less than $17 a month, by paying off his debts? In that case, he would come out ahead of Jane by the time they’re both 70. And if he freed up more money than that, he would pass Jane even earlier.

So, what’s the takeaway? While compound interest is undoubtedly a powerful tool, it’s important to also consider the impact of debt on one’s ability to invest. Paying off debt and freeing up funds for investment can ultimately lead to greater financial success in the long run.

And given the state of the average American debt situation, $17 a month in payments is a remarkably conservative estimate. According to articles in business insider,
CNBC, and Forbes the average American debt situation looks like this: About $9,000 in credit card debt which is
often split between several cards. $30,000 in student loan debt. And assuming a used vehicle was bought a little
over $21,000 on a car loan. That’s around $60,000 in total debt. If we assume 18% interest on the credit cards
and 4.5% interest on the other loans and terms of 5 and 10 years on the car loan and student
loan respectively, the minimum payments could be roughly $900 a month. Freeing up that much cashflow could make a
tremendous difference in the previous example. Let’s look back at John’s situation from before
and assume that his household’s debt situation was that of the average American. John uses his $100 a month of excess cash
flow to pay off these debts.

 

Based on the numbers it would take him roughly
six years to become debt-free. This is assuming he did not work any extra
hours or sell anything to get out of debt faster. Once he was debt-free he would have almost
$1,000 a month left over to invest. If he starts the process of becoming debt-free
at the age of 18 when Jane was starting to invest he would have become debt-free by his
24th birthday. If he then turned around and started investing
the full $1,000 a month he would actually be further along in his investments by his
25th birthday then Jane was. Granted this is largely because he has invested
more money than Jane has at this point. Jane by her 25th birthday had only invested
$8,400. That’s quite a bit less than John’s $12,000
but think of the potential payoff of this down the road if John keepS investing that
money.

 

He’ll also likely be able to lead a much
better lifestyle than Jane in the present due to his lower monthly expenses. Jane may eventually equal him in that regard
if she gets her debts paid off, but for those first several years after John is debt-free,
it is worth noting. Remember, compound interest is an incredibly
powerful mathematical force. But it can work just as hard against you as
it can for you. So it’s important to make sure that compound
interest is your ally in your finances, not your enemy. So with that being said how do we avoid this
killer of wealth? First, if you’re lucky enough to not have
any debt right now research some ways to ensure that you keep it that way.

 

If you’re planning to go to college look into
ESA or 529 plans. They are ways to start saving for college
while lowering your tax burden (which is always a nice perk). Also, look into scholarship opportunities
or PSEO. Don’t be afraid to have a summer job and work
during the school year part-time. For the record, this can also be a good option
in high school to give yourself a head start financially so long as it doesn’t take away
from your studies too much. Make sure that you always have an emergency
fund. It should contain three to six months worth
of expenses so that you don’t have to take on debt for those moments when life happens. Make sure you have insurance for those catastrophes
that you wouldn’t be able to cover with your savings. Catastrophic health emergencies are a good
candidate for this.

 

If you’re already in debt, learn about how
people have paid off their debts. Then choose the strategy that is most likely
to get you (and keep you) completely out of debt. Three of the most popular strategies are the
debt snowball, debt avalanche, and debt tsunami. I have done videos on all three of those and
they will be linked in the description. The debt snowball is the one made famous by
financial personalities such as Dave Ramsey. It has you order your debts from smallest
to largest balance and pay them off in that order regardless of the interest rates on
those debts. The plus side is the momentum you can build
up for yourself by quickly wiping out those bills. The downside is it isn’t the most mathematically
efficient way to get out of debt, all else being equal.

 

The debt avalanche is the more mathematically
efficient option if you can stick to it. It has you order your debts from highest to
lowest interest rate and pay them off in that order. This is regardless of the size of the loan
itself. The upside is the fact that you’ll be paying
less in interest. The downside is in some situations it may
take quite a while to get rid of that first bill. For those who are more motivated by seeing
the balances of the debts themselves going down this may not be much of an issue.

 

For those that are more motivated by the lowering
of bills, this could be an issue in some situations. The debt tsunami has you order your debts
from the most emotionally stressful to the least emotionally stressful and pay them off
in that order. In some cases, this could mean paying off
the largest balance that also has the lowest interest rate first. However in my experience that is not commonly
how it goes. Most of the people that I’ve seen use this
strategy tend to use it because there are personal loans between family or friends that
are causing a lot of stress in the relationship. The person with the debt uses the tsunami
to get rid of that loan first and then often switches to a different strategy such as the
snowball or avalanche. Which is another viable option for many people. There’s nothing stopping you from starting
with one strategy that will help get you going and then switching to another that will work
for you longer-term.

 

I know a lot of people who have started with
the snowball to get themselves some momentum and then switched to the avalanche once they
were on a roll so that they could save on interest. Another thing I would recommend looking into
is the power of the debt snowflake. If you haven’t heard, the debt snowflake is
a strategy where you find ways to free up money (or just happened to find the money)
that you can put towards your debt payoff strategy. The nice thing about it is it works well with
any of the other three strategies I mentioned. While by itself it isn’t game-changing it
does help your primary strategy do its job a little better. And as we know every little bit helps. If you need more motivation make sure to check
out Dave Ramsey’s YouTube channel and their debt-free screams playlist.

 

It’s filled with a lot of amazing stories
of people paying off loads of debt on various levels of income and getting to see their
relief when they are finally debt-free is very inspiring. You might also find their Turning Points playlist
interesting. It is essentially interviews of people who
have become debt-free talking about what made them decide to go through that process and
achieve that lifestyle. I’ll leave a link to both playlists in the
description as well..

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Tony Robbins: How Millennials Can Retire Rich

Oftentimes people tell me, “You know, I don’t have any money, so I really don’t know where to go. I don’t know what to start, I got to wait to have a lot of money before I begin.” That is the biggest mistake you can make. So let’s say you’re a young millennial or even Z generation come along and you’re saying, “I really want to be financially free but I don’t have any money.” You don’t need a lot of money.

You have the greatest gift on earth: time and compounding. When they asked Warren Buffett, “What made you a wealthy man?” He said, “Good genetics, time and compounding.” So what does that mean? If you could commit at 19 years old to just put $300 aside, forget the $1,000, yes, you can invest $1,000, but what you want is consistency. Let’s say you put $300 a month aside. It might sound like a lot to start with, but you’ll get used to it. You get it so it’s automatic deposit, let’s say it goes straight in the market. And the market over 100 years has gone up 10 percent over recent years, let’s say 8 percent compounded. If you take the lower number, the 8 percent and you only go to twenty seven years old and you stop, you’ve put in roughly $38,000 into that. It’ll grow to $million dollars. That’s the power of compounding. You put a little in and you got a huge return because you had time. If your best friend comes in and says at twenty seven, when you stop investing, “I’ve never done this, I should do it.” And they put 300 dollars a month in every year ’til they’re sixty five have less money because you have a little more time.

They’ll have $million dollars. Still not bad. They only put $150,000 in over a lifetime and they got $million. Pretty good deal. That’s what compounding means. You’ve got to get in the game. You’ve got to become an owner, not a consumer. That will change your life. .

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Create Big Wealth by Investing ₹1000 Per Month | How to be Wealthy? | Secrets to be Rich

You people ask a lot of concerns in the remarks. Lately a concern concerned me. That question was really fascinating. That concern was if we can conserve just 1000 a month If a man saves only 1000 per month, can he end up being a millionaire after that? Can he have even more than one crore cash? Now I will certainly answer this inquiry, yet let me ask this concern initially. You will certainly believe to yourself that we are saving 1000 each month to gain one crore rupees. If we will certainly wait for 12 months, after that this is only 12000. If we conserve also for 10 years, after that it ends up being 120000 and if we wait for our whole life also then we can'' t save one crore rupees. And also if you will think like most individuals, this is the only solution you will certainly get. That it is not possible, it may not take place yet you are watching this video clip, because you put on'' t wish to remain in that category. Well currently I am going to reveal you magic today and that magic is that it can happen.Now you will certainly

say that sir we have done straightforward maths. It can not be computed from that. Yes, you can'' t determine it from simple mathematics and you can'' t do it with Basic interest. You will certainly need to discover worsening in it and also this can be done by worsening. Now you will certainly say that sir how it can be calculated by compounding. Now let me inform you. Currently we'' re speaking about 1000 per month and perhaps if you have as well much you can likewise spend 10000 and also 100000 a month, yet right now we are chatting regarding an easy 1000 that the usual male additionally comprehends after that you have to do one thing.First I will inform you whatever, but before that, you have to merely go to the Net and after going to the Web, you go to Google as well as create a SIP Calculator. As quickly as you create the SIP calculator on Google, a display comes in front of us. You need to go to the SIP calculator. below and you can most likely to any kind of SIP calculator. Now you discussed spending just 1000 monthly, it is not a big deal.Many people can

do it yet we have actually taken 15 %annual rate of interest here. I will tell you how you will obtain 15 %. Do not fret about it, nowhere you see that I took an instance of 35 years as well as you can take an instance of 35 years, 40 years and likewise of 50 years as well as additionally take less According to this, the majority of individuals additionally assume concerning retired life. Many individuals do not consider retired life. They assume that something big will take place in 5 years and 10 years as well as we will certainly inform for them additionally, but I took an instance of 35 years that if an individual is seeing this video clip at the age of 25 as well as he begins spending from the age of 25, after that what will certainly happen in his life if he will save 1000 each month, We haven'' t readjusted rising cost of living yet, so here we are speaking concerning 35 years, so what do you assume you would have saved. Here the response is written. You have actually invested just 420000, then you are claiming we were proper. If we save a thousand rupees a month, after that in one decade it will be 120000, after that even in 35 years it will certainly be just 420000, then it will be 420000 in 35 years, but you have seen or otherwise seen one thing here.I put on'' t understand however you focus here. We have taken yearly rate of interest based upon 15%. Now you should be assuming that 15% passion is not offered in the financial institution. The bank provides just a 3% rate of interest. And also FD gives rate of interest as much as 8%, so how will we get a 15% passion price? I took 15%, you can additionally do it 14%, you can also make it 16%, so you are going to get returns, I will certainly inform you.So you will certainly have an expected amount after 35 years of 1.5 crores. So this 420000 of your own will certainly end up being 1.5 crores, so you are wondering just how it can occur. The SIP calculator is in front of you. Now allow us comprehend the meaning of this SIP. SIP means Systematic Investment Preparation or Systematic Investment Plan, so when you spend methodically as well as purchase any type of prepare for it, it is called SIP, after that you can do this SIP on your own resting at house. I don ' t need to provide too many details in this. Allow me tell you, If you can conserve this money, thousand rupees every month, you shouldn ' t simply conserve it, you'must spend it. So the difference in between financial investment as well as saving is that if you maintain conserving money with yourself, then it doesn ' t rise. But'when you spend it, after that you obtain some returns as well as Rate of interest on it. This rate of interest is one of the most effective weapon.If I established it like 18 %rather than 15 %, I have actually taken an instance before you. We are saving thousand rupees monthly. It will certainly be 1.5 crores in 35 years according to the 15 %, however if I set it at 18% as opposed to 15% and also I raise it only 3 %passion. We are speaking about each year, it is not a huge bargain, after that you will tell me just how much will certainly come Inform me by commenting, after that this portion below is this powerful tool. Many individuals do not recognize that they need to bring compound passion on their savings and also compounded interest suggests that you get rate of interest in your amount and also you also get interest on rate of interest, this is the biggest point. If you recognize this, then your video game is easy. Currently some individuals will say that we can save greater than a thousand, so here I give response to them. Who will state that we will end up being billionaires in up to fifty years, yet if we discuss five years or ten years, then a lot can happen in this? Today you are considering a thousand rupees monthly. Suppose you make as much as 50000 per month.Whatever you gain, secure hundreds of it. You consider exactly how to expand that cash. If you expand your earnings and for that, you discover the new things, you assume that from where money can originate from and you additionally discover to conserve cash, then if you have actually started conserving 5000 as opposed to 1000, then which your work is being performed in 35 years, that work can be provided for you quickly then it. Those that want to become abundant soon will have to recognize that we want to earn even more cash and we want to save cash rapidly, after that I will certainly clear a principle right here. Look, you understand 2 points. Something is to be Rich that you have got cash and also you prosper, yet then there is something called wealthy, we have to come under the classification of rich people. Wide range comes to be slowly, your house additionally counts in wealth, and also Your track record is additionally counted in and your financial institution equilibrium likewise counted, there are many things then it will certainly take time to make wealth This has to do with your portfolio, just how worth your profile is.We need to talk in crores. We have to get to there, it can take time. You need to understand these methods, so I am telling you that to come into this category, you initially need an attitude. Where many people feel that what occurs with thousand rupees, they invest and finish it and their intensifying quits right here, they will certainly never ever reach to crores yet if today also a child is watching this video by resting at residence, that obtains pocket cash. The child that places the money in a piggy financial institution can additionally believe that I can develop a demat account in my dad ' s name and I can begin SIP with my papa ' s name and that cash will certainly be conserved approximately the moment I pertain to college and also I will certainly have significant wealth and just how this will take place, today is the beginning of that and it begins with the state of mind and now we chat straight that exactly how you will certainly obtain these returns when I spoke about 15 per cent. Perhaps people did not rely on that, exactly how you obtain these returns, allow me show you.So I come on my phone to show you and likewise activate the display recording of my phone. I have actually come on Finity app, I additionally do financial investment with Finity application especially in

Mutual Fund ' s, as well as you can likewise do. I will put the web link to Finity in the summary and also remark box. So now you see that when you go to Finity, after that click Mutual Fund'. In Common funds, you do not need to put lots of minds. Your funds as well as the cash you are purchasing obtains purchased different places and also you can do that injustice there are several options for equity as well.You can buy large-cap business and also you can buy mid-cap firms and you can buy small caps and you can spend in multi caps additionally

. Now, we are speaking concerning Proactively handled common funds. We have actually discussed easy mutual fund. After that you can spend money in easy index funds as well as I will show you that, after that look below, you will be amazed to see here. Right here we take the example of Parag, of flexicap straight development, the returns are 29.46 %and also you were discussing 15% returns, there are extra returns than that come, yet the market is favorable currently if you will certainly see on the whole, after that you can get lots of more returns than that.And below there are numerous, Axis Bank and also Baroda ' s as well as UTI ' s and you can see the returns, you don ' t have to spend just according to returns, so currently you can see ratings, so below are

morningstar scores so then you can choose as well as if you wish to purchase this axis growth'chances then you will certainly click just on invest and when you will click invest, then you can start with 1000 instance as well as it will end up being composed right here that from 1000, it will end up being 600000 in ten years, so you remain to invest right here and also then this is exactly how to spend in Flexicap. Flexicap is a kind of Shared fund, apart from this, these are proactively taken care of Common funds, if you want to invest passively then right here you see that initial of all, passive investment is coming, so when you will certainly click on passive index funding, then the advantage below is that according to Nifty, mean you Spend according to Nifty 50, then the 50 companies in the great 50, you can spend your cash in it.Now I click merely on the cool, so in the nifty, you can invest in the Nifty following fifty, so I will certainly offer you an example below. Look below, this is of cool 50, yes see a fund for instance. UTI Nifty Next fifty, next fifty implies that there arenifty50

business from one to 50, so the business between 51 to 100. Your money is invested there, what occurs in the Nifty and in the Nifty following fifty, your companies keep altering and the companies which will certainly perform in it will remain in the Nifty Index, so you can spend money according to the Index. In addition to that, you can see that generally, you will certainly get to see returns over 15 percent due to the fact that the Nifty gives you a return of 14 %to 15%, so if you want to spend appropriately So we discuss UTI and also SBI and also here we are viewing HDFC and also we intend to spend cash in HDFC, so we will click merely on the financial investment now.And then you can pick, you can start investing with 500, and if you pick 1000, So you will see what will certainly be its worth after 10 years, so there is a distinction in the value is. Here you can see 3 lakh and there will be 6 lakhs. It is revealing according to past returns, but there is no guarantee of future returns according to the previous return. Right here, I have actually informed you an easy means that you pick here. I told you about the Flexicap as well as that it is not necessary. Typically, when individuals invest according to Big Cap, I clarify it to you. Some people will have inquiries in their minds. The initial point when you buy mutual funds. The first point why Mutual funds, due to the fact that several individuals do not have much knowledge concerning the securities market that in which firm to invest money or in which not so when you invest money in the energetic Shared Funds, so funds managers are assigned for this, they choose where to spend money, however if you chose to spend cash in the Huge Cap Fund, then your money will be purchased the business with big resources after considering their market capitalization, if you will certainly select mid-cap or mid-size firms then the business whose market capitalization can be found in this classification, your fund supervisor will be limited according to the category.But as soon as you select the flexicap, after that the fund manager can invest money in any business in which he believes that there can be growth, after that you can worsen your wide range by just picking mutual funds. I revealed you examples, the point is from where you can begin. I had a conversation with the monitoring of Finity. Then he informed me that the moment of financial investment was yesterday, and

it passed and also the next finest time is today.So if you intend to start spending, after that you can begin it today. Currently if you maintain investing every month, see you were throwing away that money, perhaps it was losing, today it will be saved as well as compounded as well as you will have actual Riches. So today you have come to understand that magic secret which really couple of people understand because really few people prosper in life and you can become, this is your option, see you will certainly end up being or otherwise, time will certainly inform. If you will certainly have some good practices, out of which investing and also spending continually is a great habit then you are going to go a lengthy way in life. I think that our future is brilliant. What do you assume? Tell me in the comments below, what did you like ideal regarding this video? You will tell me in the comment.You need to do an investment strategy on the Finity. Simply three is a link in the summary and also comment box, you can do it with your cellphone and also you put on ' t require a representative and also you wear ' t requirement to ask anybody. You can do it by yourself. Ultimately, share this video clip to ensure that this ideal information to a lot of individuals and if you are enjoying this video clip on Facebook after that follow as well as if you are enjoying this video clip on YouTube then subscribe as well as click the Bell icon, so I will certainly see you in the following video, similar to this video clip to provide your love as well as go self-made

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