What is COMPOUND INTEREST | How you can RETIRE A MILLIONAIRE
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- เผยแพร่เมื่อ 8 ก.พ. 2025
- Two of the most frequent questions we get from clients are about how to become a millionaire & how to retire rich. So how do YOU save for just 10 years & become a millionaire? And how is it that if you start later, you could end up saving 3x as much as the person that started earlier & still risk NOT becoming a millionaire?
💡 How does compound interest work? What is compounding, especially when it comes to compounding in the stock market? How can compound interest make you rich?
💡 At what age should you start stashing away your cash & where should you keep this money? What happens if you start too late - can compound interest still help you become a millionaire or an HSA millionaire?
💡 Plus, why did Albert Einstein refer to compound interest as the eighth wonder of the world?
Our latest video for your financial journey "What is compound interest | HOW CAN YOU RETIRE A MILLIONAIRE" answers all these questions & more!
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Thank you so much Jen for another powerful video, learned a lot as usual. 💎💎💎
💎💎💎 great video on compound interest, I definitely want to retire a millionaire 😃💵💰
We see your binge-watching today 😀👍
@@DiamondNestEgg yes ma'am opened up my individual treasury direct account on 8/8 unfortunately I have to send in the notarized form 5444 snail mail. Thanks for encouraging me to do so, excited to get started on building my t-bond ladder 😀
@@DiamondNestEgg I also just recently opened up my Roth IRA, can't wait to max it out this year. I am a small business owner, enjoying the investment journey for sure, I am learning a lot watching your videos. ☺️
In re: to the 8th wonder of the world, as they say, Compound Interest, how does this little ditty figure in? Apr vs Apy for certain securities.
Hi Jennifer @diamondnestegg, where can you earned a 7% compound interest?
So we’re going to research now what investment vehicles pay Compound Interest? That’s the mystery, sort of.
But, funds may be one investment, have to research though the volatility, right?
Do I Bonds have compound interest?
is this only for roth ira not the 401? thanks
So what investments pay the compound interest? We stated the point 8th wonder of the world. We’ve heard that, and you’re saying that, also.
When you say Roth Ira you mean to a brokerage account settlement account?
Roth Individual Retirement Account
@@DiamondNestEgg I have a self managed Roth iray with Vanguard Are you talking about investing settlement fund account or In equities
@@DiamondNestEgg What I think I'm getting at is what type of bonds equities whatever is this Iray Invested in
I have been telling my kids that if you could get to $100k in their IRAs by age 30, they would be millionaires at retirement (I use the rule of 72, doubling every 10 years, or 7.2 percent. For those who want to build generational wealth, parents should fund your children's IRAs when they are young. Often, they are not making that much money and have other financial needs, so if you can help them with a retirement contribution during the early years, you ensure their future financial security. I sent each of my kids $5k every year after they started college so that they could start their IRAs even with a summer job. They all met the $100k goal (thanks to a good stock market run). I'm feeling pretty good now.
Well done. I'm sure your kids are thrilled. Agreed on helping your kids out if you can. For others supersavers reading this, just make sure your children have sufficient earned income to "qualify" for the IRA contributions.
Excellent personal finance advice ever heard. Thanks a bunch for enlightening
Will you do a step by step video on setting up a roth with TD Ameritrade to start this journey ?
I'll add it onto our list
@@DiamondNestEgg will you do a step by step video on purchasing T-bills with Chase bank / JPMorgan also, thank you Jennifer.
any guest on I bond interest in May/23. should we buy i bond now or CD 4.7%?thank you
Stay tuned - more I-Bond videos coming
If I understand correctly, compounding interest doesn't apply for treasury Notes and Bonds. They do "compound" semi-annually but not the same as compounding explained here.
Hello. Could you maybe do a video on how to do a spousal roth ira for a stay at home spouse? If we max out a 401 k already for my husband and get a company match of 6%, can we do backdoor roth contributions with after tax dollars for each of us or no? Can u also break down how income comes in to play for that? It is so confusing and I think you could simplify it just like you did with your i bond videos. What is the highest income level you can do that with? We are in our 50s and I am looking to max out anything available to us. Thanks!
We'll add this to our list
Hi. Do you personally offer personal financial advisor services ?
I do, but we are not accepting any new clients at this time
Very well done tutorials. Got into I Bonds based on your channel. Thanks
I’m 24 😐
Great job - as always! So what earns 7% ? I'm struggling to find that part of the equation.
This was the original source article. It seems the numbers have been updated since then & are now even higher: www.investopedia.com/ask/answers/042415/what-average-annual-return-sp-500.asp
Don't do what I did and stick with and forget with a Roth CD ("very safe" investing). I wasn't finance savvy at a young age but kept hearing to "get a Roth IRA" over and over if you cared about retirement. Rates have been so abysmal for a long time I've actually lost significantly to inflation.
What pays 7% interest?
That’s the historical inflation-adjusted return of the S&P 500 over time, at the time this video was posted
Thanks for sharing and making it easy to understand; awesome video and detail.
For waiting to start this until age 35 vs. age 25, you compute $702,077.03 - $609.985.50 = $92,091.53. This being the “amount not earned by waiting”. Is that correct?
Should the numbers be the net numbers (backing out the contributions amount)?
Such as:
Age 25 net: $702.077.03 - $86,500.00 =: $615,577.03.
Age 35 net: $609,985.50 - $180,000.00 = $429,985.50
$615,577.03 - $429,985.50 = $185,591.53. This being the “amount not earned by waiting”.
Your math looks great! Yeah, it makes a lot of sense that the real amount not earned by waiting wouldn't include the amount they put in themself. And it's pretty much twice as much as the number she used in the video, which is wild!
Jennifer is great!! Great video and great explanation.
Year 35 (you are now age 55) - almost $1 million in value from contributing a total of $86,542.40. Net (backed out the $86,542.40 contribution): $909,228 of compound interest earned money completely tax free. Correct? So, I can begin taking at age 55ish (before normal retirement age of 65) Correct?
Nice video! Very informative. I believe in the power of compound interest. 🙂
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You seem nice, but you talk so fast I have a hard time to understand you.
Thanks for the feedback - we have subtitles on if that helps at all (and I think there is a way to slow down the audio as well)
Under the settings option, you can adjust the play back speed and make her talk as slow as you want. LOL If you're using a computer, just click on the gear in the lower right of the video.
I think the speed/cadence at which Jennifer goes, with the jingle that plays on her most recent videos is just perfect. It keeps you mentally engaged on subject matter that isn't familiar to most. It incorporates just about every learning modality (visual, auditory) except kinesthetic (but you can do that i.e. by writing/taking notes). Her style is to the point without distraction (I'm thinking about a youtuber that has this tendency of throwing his hands/arms around as he speaks)
But that is my opinion, and her style may work for most (like me). But for those it does not, it's great that you can caption videos and speed up or slow down the video/audio feed or rewind and watch that portion again. Sometimes repetition really pounds mental concepts in.
@@wallace_n_gromit3180 Thanks for feedback - we were just discussing how to "fine-tune" the videos going forward!
@@wallace_n_gromit3180 well said, we enjoy listening to Jennifer: fluent, sharp, straight to the point, clear, articulate, knowledgeable and engaging.