“Those who understand interest earn it, those who don’t, pay it” — Albert Einstein
The first three things you need to understand about interest can be summed up with the acronym ICE:
- Instantly (you earn interest from Day 1 – no waiting for a distant uncertain pay off)
- Continuously (your money doesn’t take the weekends off or get sick – you earn interest every day)
- Effortlessly (the bank doesn’t question if you’re working up a sweat or sleeping-in, you still get paid)
Money is meant to grow. Interest is just a name given to fruit produced when money is planted as a seed.
If you can take your income and instead of spending it all you can convert some of it into an income-producing asset, you are well on your way to profit. And interest works in every country, culture and economy.
Some people and businesses don’t know how or where to start making a profit. Interest is the starting point.
Simply set aside some savings and deposit in an interest bearing bank account (there are heaps of high-interest online savings accounts available with no fees). This simple exercise will help you start creating passive income – where your money now works, instead of, or in addition to you. When you understand interest, you make money work for you.
The pay off really snowballs when you start earning interest on your interest. Compound Interest starts from the beginning of the second month and then this second-harvest (the fruit of the fruit) also grows Instantly, Continuously, and Effortlessly. Can anyone say “Ice, Ice Baby”?
Unfortunately, people who don’t understand the power of this are in debt and they are paying interest on their interest. In other words, the power of compound interest, is working against them. It’s like having a gun and instead of using it to protect yourself, you use it to shoot yourself.