How many of you know about compounding your money? It’s where your money makes money if you invest smart and let it grow.

I like to call it the “Money Snowball” effect of compounding which is never taught in school. I read a book about Warren Buffet 35 years ago, where he described compounding as the “eighth wonder of the world” and 98% of his wealth came strictly from this.

This is also called the Rule of 72 and the premise is that at 10%, your money will double in 7 years, then that amount will double again by the 10th year, then it only takes a few more years to double that whole amount again. Living in Colorado, I visualize a Money Snowball, as it gets bigger and faster as it rolls along.

This financial tool is rarely taught, and financial advisors don’t really discuss it as well. So why all the mystery behind it? Because everyone hesitates to discuss hypothetical growth patterns. However, if you build a simple spreadsheet with various assumptions that you can test and change, you will quickly see how this truly can work for you.

The ideal plan is to start saving young, invest regularly and NEVER stop or take anything out until you retire. However, it’s never too late to start and by giving up your $6 cup of Starbucks for 30 years, you can retire early while your investments keep working, giving you a paycheck each month.

The other way people can add to their wealth is to buy “smart” real estate that is special, something different than what everyone else owns. If you own it for two years, or 24 out of 60 months, you can make up to $250,000 TAX FREE if you are single, or $500,000 if you are married. Did you even know that anything in life is tax free? The trick is that you have to be willing to move every few years or so to make it really work for you.

So are you ready to give up that $6 cup of coffee everyday? Or pack up and move more often? Or be disciplined and never touch your investments, often giving in to the “selling low and buying high” method? Why not let your hard earned money actually work for you?

Then you will be on your way to reaching financial freedom. You can live the life you never thought was possible, not working until you drop in your tracks someday. If you would like more information, please contact me.

I hope that you will join me on this journey of inspiration and motivation. Please subscribe to:

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