Financial Intelligence

Finance Tips
What is financial intelligence. Banks have it, many consumers don't. When you drive to any city in the country, you will find many times that the largest nicest buildings there are the banks. Why? Because the banks understand a huge financial principle and that is this: Those who understand interest earn it, those who don't pay it.

Albert Einstein said: Compounding interest is the greatest mathematical discovery of all time.

As an example. Investing $1000 per month for 30 years at 10% equals 2.3 million dollars. So what does investing $2000 per month for 20 years equal? The answer: 1.5million. You may think $2000 a month for 20 years would be more than $1000 a month for 30, but you would be wrong.

The power of compounding interest is what gives early investors a head start on investors who begin investing more later.

Conversely, the interest you pay on your credit cards and on your mortgage gives banks the edge in building wealth and takes the edge away from the borrower.

The more you understand finances, the more financially intelligent you become. The more financial intelligent you become, the greater the opportunities you will have for building wealth.