Comments on: Compound Interest – Personal Finance Fundamentals http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html Bridging the gap between saving money and investing Fri, 25 May 2012 14:42:36 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Gail http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-445871 Gail Sun, 28 Sep 2008 18:13:23 +0000 http://www.savingadvice.com/blog/?p=2485#comment-445871 No matter the interest rate, the sooner you start saving and leave it in place EARNING THE BEST INTEREST RATE YOU CAN FIND, the more money you will have at the end of the savings period. That is the miracle of compound interest! This is something people need to learn at the beginning of their financial life. That is what these blogs are about and I do not know the author of the article, but I do know he was blessed to have a father teach him about finances at an early age. No matter the interest rate, the sooner you start saving and leave it in place EARNING THE BEST INTEREST RATE YOU CAN FIND, the more money you will have at the end of the savings period. That is the miracle of compound interest! This is something people need to learn at the beginning of their financial life. That is what these blogs are about and I do not know the author of the article, but I do know he was blessed to have a father teach him about finances at an early age.

]]> By: VIJAI http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-440049 VIJAI Fri, 19 Sep 2008 17:43:53 +0000 http://www.savingadvice.com/blog/?p=2485#comment-440049 Jordan, I really liked the story and moral or lesson learned. I never know the 72 thumb rule and its good one. Compound Interest is the greatest invention and ever lasting one. No doubt about it. Vijai Jordan,

I really liked the story and moral or lesson learned. I never know the 72 thumb rule and its good one.

Compound Interest is the greatest invention and ever lasting one. No doubt about it.

Vijai

]]> By: Oasdg http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-435718 Oasdg Sun, 14 Sep 2008 18:01:06 +0000 http://www.savingadvice.com/blog/?p=2485#comment-435718 Saving now is the surest way to keep yourself out of debt in the future! You should always look around and see if you're getting the best return you can. There are a lot of websites out there that can give a glipse of the going rates->bankrate.com is my personal favorite. Saving now is the surest way to keep yourself out of debt in the future! You should always look around and see if you’re getting the best return you can. There are a lot of websites out there that can give a glipse of the going rates->bankrate.com is my personal favorite.

]]> By: gmc http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-432331 gmc Fri, 12 Sep 2008 14:16:24 +0000 http://www.savingadvice.com/blog/?p=2485#comment-432331 Good basic information. It is amazing and frightening to see how many college educated young professionals do not understand the basic concepts of the importance of early investing, determining risks of various investments, returns on investments and fees and loads of various funds/institutions. Our society has been far too tolerant of embracing instant gratification at the expense of fiscal responsibility. Even though one may see fluctuation in returns over years, practicing disciplined savings and investing will certainly make for a brighter and more secure future. Good basic information. It is amazing and frightening to see how many college educated young professionals do not understand the basic concepts of the importance of early investing, determining risks of various investments, returns on investments and fees and loads of various funds/institutions. Our society has been far too tolerant of embracing instant gratification at the expense of fiscal responsibility. Even though one may see fluctuation in returns over years, practicing disciplined savings and investing will certainly make for a brighter and more secure future.

]]> By: Steven http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-430962 Steven Thu, 11 Sep 2008 15:31:51 +0000 http://www.savingadvice.com/blog/?p=2485#comment-430962 @SeattleSmiths A short term bond fund invests in a broad range of corp. debt securities, obligations of the US government, and it's agencies, with a weighted maturity of 10 years or less. The fund also invests 20-35 per cent in high yield or junk bonds. To my knowledge, there has never been a problem with short term bond funds and they're considered perfect for "widows and orphans". Like money market accounts, you can write checks against your fund. Returns on my money market account: 1year 3.08 3years 3.09 5years 3.43 Returns on my short term bond fund: 1year 6.19 3years 4.48 5years 3.83 As short term instruments, you can see why you should diversify your cash. And watch the fees and expenses! That's why I do business with T Rowe Price and Vanguard. Good luck! @SeattleSmiths
A short term bond fund invests in a broad range of corp. debt securities, obligations of the US government, and it’s agencies, with a weighted maturity of 10 years or less. The fund also invests 20-35 per cent in high yield or junk bonds. To my knowledge, there has never been a problem with short term bond funds and they’re considered perfect for “widows and orphans”. Like money market accounts, you can write checks against your fund.

Returns on my money market account: 1year 3.08 3years 3.09 5years 3.43
Returns on my short term bond fund:
1year 6.19 3years 4.48 5years 3.83

As short term instruments, you can see why you should diversify your cash.

And watch the fees and expenses! That’s why I do business with T Rowe Price and Vanguard.

Good luck!

]]> By: SeattleSmiths http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-430227 SeattleSmiths Thu, 11 Sep 2008 00:49:16 +0000 http://www.savingadvice.com/blog/?p=2485#comment-430227 Steven: Can you explain short term bond funds and possibly give the advantages/disadvantages? I have a money market fund, but need to research your other suggestion further. Steven: Can you explain short term bond funds and possibly give the advantages/disadvantages? I have a money market fund, but need to research your other suggestion further.

]]> By: Steven http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-429995 Steven Wed, 10 Sep 2008 21:13:32 +0000 http://www.savingadvice.com/blog/?p=2485#comment-429995 @Ivsport I have half my money in a short term bond fund and half of my money in a money market fund. When money market rates go down, bond rates go up and vice versa. Vanguard and T Rowe Price offer these funds. I make deposits into each account monthly. Good luck @Ivsport

I have half my money in a short term bond fund and half of my money in a money market fund. When money market rates go down, bond rates go up and vice versa. Vanguard and T Rowe Price offer these funds. I make deposits into each account monthly. Good luck

]]> By: IVSPORT http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-429839 IVSPORT Wed, 10 Sep 2008 18:40:11 +0000 http://www.savingadvice.com/blog/?p=2485#comment-429839 I am a new grad from college and just found my first well-paying job. I'm looking to save but don't know where to find compound interest, especially in the rates you're mentioning. Thanks to advice from a friend, I started a WaMu savings account with 3.75% APY, which he says is the best I can do. Any ideas on how to do better with the limited savings I will have? I am a new grad from college and just found my first well-paying job. I’m looking to save but don’t know where to find compound interest, especially in the rates you’re mentioning. Thanks to advice from a friend, I started a WaMu savings account with 3.75% APY, which he says is the best I can do. Any ideas on how to do better with the limited savings I will have?

]]> By: Mike http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-428502 Mike Tue, 09 Sep 2008 23:38:38 +0000 http://www.savingadvice.com/blog/?p=2485#comment-428502 To all of the negative posters I would ask why you came to this site in the first place? The post was well written and simple to understand. Like myself I knew this rule, but others may not have. In this day and age even 5% is better then what the S&P has dished out (flat lining) for the past 10 years. Take inflation in to account and your losing serious money. About 7 years ago I settled for a jumbo IRA pulling my money out of the markets. At 5.5% the money is doing something other then losing. Jay there are many banks paying up to 5.5%. I went to bank rate when I first decided to pull the plug on the market and settled for a bank 3 miles from home which had the best rate at the time. Debbie you can't make 6% over inflation with the S&P. 3 to 4% is better then a kick in the rear! Cash is king and will be for several more years. If people were to save like they did years ago we wouldn't be in the mess we are in today. To all of the negative posters I would ask why you came to this site in the first place? The post was well written and simple to understand. Like myself I knew this rule, but others may not have. In this day and age even 5% is better then what the S&P has dished out (flat lining) for the past 10 years. Take inflation in to account and your losing serious money.

About 7 years ago I settled for a jumbo IRA pulling my money out of the markets. At 5.5% the money is doing something other then losing.

Jay there are many banks paying up to 5.5%. I went to bank rate when I first decided to pull the plug on the market and settled for a bank 3 miles from home which had the best rate at the time.

Debbie you can’t make 6% over inflation with the S&P. 3 to 4% is better then a kick in the rear!

Cash is king and will be for several more years. If people were to save like they did years ago we wouldn’t be in the mess we are in today.

]]> By: Gari http://www.savingadvice.com/articles/2008/09/07/102485_compound-interest.html/comment-page-1/#comment-428030 Gari Tue, 09 Sep 2008 17:38:08 +0000 http://www.savingadvice.com/blog/?p=2485#comment-428030 It sounds like he respects and appreciates the early financial advice his Dad tried to teach him! It sounds like he respects and appreciates the early financial advice his Dad tried to teach him!

]]>