"Investment Advice That's Worth Its Weight In Gold!"Takesit, Compoundsit, and Spendsit were triplets. To the average observer, they were alike in every way.
Millionara, their doting aunt, knew that this was not the case. But she adored them all equally and gave them each $1,000 to celebrate their 18th birthday.
Hoping to impart some of her considerable financial wisdom to the boys, she told them,
"Use the money well and it will reward you many times over."Spendsit decided to use his money for a new stereo system and a blowout birthday bash. By the next morning, the $1,000 was gone. But he had his new speakers, some great (if fuzzy) memories of the party, and a potential love interest who was impressed with his free-spending ways. Spendsit felt rewarded indeed, and was pleased that Aunt Millionara had given him such good advice. He started charging a lot on his credit card in order to impress his new girlfriend.
Takesit was more conservative with his money.
He invested it at a monthly interest rate of 1.50%. After a month, he had added $15 to his original investment. Takesit withdrew the $15 and treated himself to dinner out. He did this every month, thinking that this must be what Millionara had meant by the money rewarding him
"many times over." After all, his original $1,000 investment was intact, yet he still had extra pizza money every month.
Compoundsit also invested his $1,000 at a monthly interest rate of 1.50%.
But unlike Takesit, Compoundsit decided to reinvest his earned interest every month rather than withdrawing it. In the second month, Compoundsit earned $15.23 in interest (1.50% of $1,015). Takesit scoffed, saying that it's hardly worth passing up a dinner out for an extra 23 cents.
As the months flew by, Compoundsit's capital continued to
grow,
while Takesit's capital remained stuck at $1,000. All he had to show for his investing was a bunch of long-forgotten pepperoni pizzas. He began to wonder if he had misinterpreted Millionara's advice.
Compoundsit, on the other hand, was receiving ever-growing interest payments which he continued to reinvest immediately. After one year, his monthly interest payment was $17.93, while his capital had grown to $1,195.62.
That's an annual interest rate of 19.56% per year!After five years, Compoundsit's money had grown to $2,443.22. He was only 23 and had already more than
doubled his money with no effort whatsoever!By Compoundsit's 35th birthday, his capital had grown to $20,848.40 and by the time he was 65,
he had become a millionaire many times over with a capital of $4,434,532.36.And what about Spendsit? He had fallen behind on his
credit card payments and could only scrape together the minimum each month. The interest on his debt was
compounding, so he had to pay interest on the interest. And interest on the interest's interest. And so on.
Every month, as Compoundsit got
wealthier, Spendsit got
poorer. He was eventually forced to take on new debt just to pay the interest on his existing debt. Spendsit finally realized that he was in a bottomless pit that just kept getting deeper.
The stereo was repossessed and his girlfriend dumped him. The financial "hangover" that started on Spendsit's 18th birthday plagued him for the rest of his short life! He was forced to declare bankruptcy by the time he was 35 and committed suicide just a few years later.
Takesit was stuck in the rat race and couldn't find a way to get out. He kept spending the interest he received on his investments, yet never paid the interest on his debts on time! As a result, he never seemed to be able to make ends meet and died alone in a small cabin in the mountains.
Compoundsit became a multi-millionaire without any additional effort on his part. He traveled the world and eventually married a beautiful and intelligent woman who admired him for his apparent financial genius.
Three brothers. Different paths. Different results. But here's the catch: The thing that made Compoundsit rich was the same thing that sucked the money out of Spendsit's pockets. Albert Einstein, arguably one of the smartest persons who ever lived, called this thing "the most powerful force in the Universe." And indeed, it's a force that can be your best friend or your worst enemy. What is it?
It's compound interest. And it can change your life. You can harness it to your advantage or ignore it at your peril.
Do you want to be like Spendsit, Takesit, or Compoundsit? The choice is entirely yours. It all starts with a decision, a decision you can make immediately. Choose wisely and you will indeed, as Aunt Millionara promised, be rewarded many times over.
[To find out how to make the power of compound interest work for you, take The Effortless Prosperity Challenge. We have access to programs that double our money in 1 to 4 months which is quite a bit faster than the 5 years it took Compoundsit to double his :o). ] *As always, if someone has referred you to The Effortless Prosperity Zone, please use their link to take The Challenge.
I got this great motivational email from my little sister today (she hates when I call her my little sis :o). 
