Money Magic

Time is not money, but time is a form of wealth.

Finance people think differently. We get triggered by monthly expenses that most people would shrug off. Why? Because we understand and utilize money magic. In finance jargon, this is called compounding interest. It refers to when your investments make returns; those returns will also make money. Over time, this effect is exaggerated.

So, when a finance person sees a new monthly expense of, say £100, they get triggered. You may respond, ‘well that sucks, but costs are going up everywhere and it is only £100.’ But to a finance person, it is much more.

What do we see? Possibly £16,000, or even much, much more. That is right, over ten years £100 monthly will be just over £16,000 with a 6% return. What could you do with that money? A decent used car? Several vacations? A renovation?

If you keep going another decade, and you attain an average return of 8% over 20 years, it is almost £57,000. What can that buy you? A college fund? A down payment on a property?

This is money magic. You are combining the wealth of abundance (money) and magnifying it with the wealth of time. If you can start by investing small amounts monthly, you will see a big impact in wealth building. Ideally, if you are vigilant with your budget, or you can prevent the monthly expense creeps and redirect it into investments, you will be amazed at how fast you will accumulate wealth.  Then you can have all the fun of choosing how to spend it.

Do you invest monthly?

Disclaimer: This article if for educational purposes only and is not personal financial advice.