If you’ve spent any time in debt, you’re aware how fast things can get out of hand. This is because you are compounding interest for your financial institution. After a certain period of time, you will surely make your financial institution a lot of money. The idea is to turn the tables and be the compounder (you be the bank) Don’t worry that rates are low; just understand the concept.
If you can change your relationship with money, you can change your life and have all the time you need. But you have to change the way you look at things, first. As mentioned, I realize that saving’s interest rates may not be something to get excited about right now, with rates so low. But don’t worry about that for now, just think of your perception of time as money and look at how you can make the phrase “time is money” work for you. “The Glass Is Half Full.”
Getting Over the Mental Hurdle of Being Debtor
Don’t just think interest rate, think time. Change your mindset.
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Nice vid and post.
Very few understand the power of compound interest – of course when it’s you paying the bank the interest rates are significantly higher and in their favor, so much more the reason to turn the tables, and turn them early (and look for a better ROI …lol…)
Thank you for your comment Valentina – Getting out of debt requires one to realize how harmful compounding can be when it works against you.
Wasn’t it Einstein that once said that compounding interest is the most powerful force in the universe?
Debt is essentially your future time transported into the present: You had better hope that that debt is for something that improves your life or leaves you better off somehow, otherwise you are simply impoverishing yourself. This is as true for nations as it is for individuals.
“Debt is essentially your future time transported into the present” Very well stated, Kevin. Using debt for consumption like clothes, meals, vacation, exotic boats, etc. will end up costing you more than any present value. Seems like a concept that is hard to grasp for many.