QOTD: When Your Interest Earns Its Own Interest

Let’s say you decide to invest $100 and you have the ability to get a 10% annual rate of return. At the end of 1 year you will have your $100 in principal and an additional $10 in interest. Nothing special. However, as you continue to compound your money, the process starts to behave fractally. How? In year 2, when your $100 once again gives you $10 in interest, now your $10 in interest from year 1 will throw off $1 in interest as well. The $10 has begun to behave like the $100 did in year 1. You can imagine the relationship between the $10 and its $1 in interest like the $100 and its $10 in interest. And this process continues in year 3 when the $1 in interest from year 2 throws off $0.10 in interest, and so on.

The beauty of compound interest is that it continues to behave fractally with each piece of interest eventually earning its own interest.

I worship at the altar of compounding. You should too. I don’t just mean as it pertains to money, but as it pertains to all things – relationships, practicing an instrument, exercise and athletics, reading and building knowledge, etc.

Hit the link above to read the rest of this post.

What's been said:

Discussions found on the web
  1. sex commented on Sep 18

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  2. crown toyota commented on Sep 22

    … [Trackback]

    […] Find More Info here on that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  3. bitcoin trading software commented on Sep 22

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  4. Buy Weed Online commented on Sep 23

    … [Trackback]

    […] Find More Info here to that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  5. mail order THC concentrates online commented on Sep 23

    … [Trackback]

    […] Information on that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  6. Harold Jahn Edmonton commented on Nov 04

    … [Trackback]

    […] Find More here on that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  7. 사설토토 commented on Dec 25

    … [Trackback]

    […] Read More here on that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  8. 메이저토토사이트 commented on Dec 28

    … [Trackback]

    […] Read More to that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  9. deemhead.com commented on Jan 14

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  10. Casio QV-R200 manuals commented on Jan 21

    … [Trackback]

    […] Read More on on that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  11. bandar77 commented on Jan 23

    … [Trackback]

    […] Find More on to that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]

  12. CI CD Solutions commented on Feb 07

    … [Trackback]

    […] Information on that Topic: thereformedbroker.com/2017/07/11/qotd-when-your-interest-earns-its-own-interest/ […]