Why You Should Know About Compound Interest?

Why You Should Know About Compound Interest? - as part of the expert series by GeoBeats. Key to having a successful retirement plan is to start early. And why does everybody say that? Well part of it is because of compound interest. So I would like to try and explain compound interest so you can see how valuable and how powerful it really is. Let's say I put $100 in a savings account and it earns 5%. Well in a year, I will have a $105. Maybe I add another $100, and in another year I have not only just the $105 that I had and the $100 that I added, but the interest on $205, which is more. You start to add more zeroes, you add a lot more time, and you can see that you will end up with a lot more than if you just save for one year. So your money is growing on itself. Not just the money you keep adding, but the money you have invested. So that is what is so powerful and that is why starting early is a great way to go.