COMPOUND INTEREST; What They Don't Tell You

Compound Interest is one of those methods of increasing money in an exponential rate. It by far pays more than the traditional way of saving money with little or no increase at all and simple interest (which is the percentage increase in the principal sum of a certain amount). For this reason, it is considered a safe and risk free method of wealth creation which has been in existence for ages.
To understand the topic more better; Compound Interest is the interest on a deposit or loan on a principal amount that accrues overtime. In simple terms, it is the interest (% increase) gotten from the interest made on a principal amount i.e interest made on an interest generated. It continues to accumulate for as long as the loan or deposit period last.

THE GOOD SIDE OF COMPOUNDING

When compound interest (which is your market investment as a worker) is judiciously utilized, it has the ability to make you a rich person.
For example, a 20% annual interest on a $10,000 investment will become $61,917 in 10 years, $383,376 in 20 years, $2,373,763 in 30 years, and $14,697,716 in 40 years respectfully. This means if $10000 is the only money kept in a 20% annual yield with no additional money added. Smart idea right? And as a smart person you can easily plan your future with this approach. So most employees deploy this method as their pension plan.

Compounding can work to your advantage when it comes to your investment. Infact its a good factor to consider in terms of wealth creation since all that is required is just a one time deposit of your initial capital. Sadly, it can also work against you in terms of loan that carries high interest rates. Now see (what you don't know)

WHAT THEY DON'T TELL YOU

By now you should understand that Compound Interest is a primary wealth accelerator. Normally it comes from market investments like mutual funds, 401(k)s,
and other traditional investments preached to us majorly by financial advisers. And these various investments uses it as a financial strategy which is a mathematical construct that outlines the power of interest accumulation over great periods of TIME - emphasis on time.
This is because wealth creation via compound interest requires the passing of time and lots of it.
Like a job, compound interest, or market investments such as mutual funds and
401(k)s, can't be leveraged nor can they be controlled. They rely on deficient
math to create wealth.
Inasmuch as the income you make in a job is measured in an hourly rate, monthly salary or an
annual salary, the wealth acceleration process of compound interest is also
measured in time that is equivalent to your years or working actively. So how much more time do you have to work in your current employment?
The time attachment makes this principle unrealistic. If you earn $10/hour, you're limited to 24 hours of exchange per day. You cannot go beyond the maximum limit of 24 hours so there is nothing you can do to change that. And guess what, you can't trade your time for income because it is humanly impossible to work 24 hours in a day round the clock for 7 days, a month, or one year. This gives an uncontrollable limited leverage on your income. The prohibition is the same for a salary earner.

Another factor behind the limited leverage is another big wealth killer no control. Consider this, can you
control your employer? Can you control your salary to increase the way you want? Can you control the
economy and your 20% annual interest to remain stable? Can you earn $50,000 one year and next year bank in $5 million? Can
you even control anything about your job, including the 4% pay raise? You
might think you can, but you can't. The control is weak, if not
absent. These are the things they don't tell you.

They don't tell you that a 20% return year after year is impossible with those traditional way of compound interest except you
invest your money with Bernie Madoff or Charles Ponzi. They don't tell you that in 20 to 40 years
time (depending on your present age) you'll be dead, and if you're not, you'll be close. They don't tell you the purchasing power of your currency weakens in 30
years time, your $2.5 million will likely be worth $250,000 in today's dollars and that
a tin of milk will cost $15. They don't tell you that this method of wealth
acceleration is not what they use. They don't tell you plenty, and yet you're
supposed to believe it without question.

Every day, people sacrifice their time for tiny nuggets of wealth, where time is
the liability and not the asset. Anything that steals time do not have the
power to free time. It is a liability. Wealth cannot be accelerated when attached to calculations based on time.

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