The Power of Compound Interest

By MoneyBlueBook

The mightiest monetary force in all of the investment world is not the Federal Reserve. It is the power of the compound interest. If I could offer only a single piece of financial advice to anyone, I would encourage the individual to understand how compound interest works and why its effects are so dramatic over time. Even ole Albert Einstein supposedly called it the "greatest mathematical discovery of all time", and deservedly so.

Very few people become rich or financially secure through wages alone due to the realities of the trading hours for dollars concept, but by taking advantage of the miracle of compound interest, you can have a much better shot at achieving your financial goals.

The way compound interest works is quite straight forward. When you invest money, you earn a certain percentage as interest for the first year. In the second year you earn interest on the original principle and the interest accumulated during the first year. In the third year you will earn interest on the original principle as well as interest on all the previously accumulated interest. The more time that passes the greater the interest that accumulates.

The best time to invest was yesterday, but the second best time is now. Don't delay! The sooner in time you start investing the greater the benefit you'll reap through compounded interest.

Hypothetical Example To Demonstrate the Power of Compound Interest

To illustrate, let's compare two people - Bill and Hillary. Bill invests $2000 for 6 years straight in a savings account earning a fixed

By MoneyBlueBook

Are you like me? Do you keep idle cash sitting in your investment brokerage account while waiting for a juicy investing opportunity to come along? If so, you might want to make sure that idle cash is getting the best interest rate it can.

The stock market's been volatile lately so I've chosen to park a sizable amount of cash in my primary investment account as I wait for the right buy opportunity. But if you're like most people who adopt an old fashioned buy and hold strategy, you might not realize how low of a return you are getting on that idle cash. Your cash pile may be missing out on some great opportunities as it sits parked in your brokerage account. That's because many brokerages only pay you a pitiful rate of return on idle cash by default. Oftentimes, brokerages pay an interest rate as low as 1%, while they make a bundle by investing your money for themselves.

Upgrade to a Higher Interest Rate Money Market Account

If you want a higher rate of return you must ask your brokerage because usually most deposits are automatically swept into a low interest holding account by default. If you don't contact them and ask, they have no particular incentive to let you know that you have higher interest rate options for your idle funds. For starters:

By MoneyBlueBook

Okay, not really. In fact I didn't even play this time around. Come to think of it, I've only played the lottery twice in my life before. I'm writing in response to today's lottery news announcement that four winning tickets were sold for the estimated $330 million Mega Millions jackpot, one each in Maryland, New Jersey, Texas and Virginia. After taking almost half of it out for taxes and splitting the pot four ways, that's barely $50 million apiece. Mere chump change. :)

My Powerball Tickets

I remember the last time I bought a lottery ticket a few months ago - it was a Powerball ticket and it was when the Powerball jackpot had ballooned to a ridiculously high amount. Since Powerball wasn't sold in my state, I had to drive across the border into a neighboring state to snag one. After looking around, I finally found a gas station that sold Powerball tickets. My greedy and overeager brain sprung into action. Why buy one ticket when I can quintuple (five times) my chances by buying five! Delighted at my own ingeniousness and completely oblivious to my faulty mathematical logic, two minutes later I was walking out of the gas station with a potential winning ticket in my hand. On my drive home I started thinking about what I'd do with the money if I won, and then I started to get really excited. New house perhaps, how about 2? A new car maybe, get 2 as well. Never having to work again

By MoneyBlueBook

What are paid online surveys?

Filling out a free paid online survey is an interesting way to pass the time and make some money on the side. Your opinion is valuable to many companies for market research purposes and they are willing to pay you for your opinion. Your participation is used to influence and guide companies on how they go about developing products and services to meet consumer needs.

How much money can I make?

You'll most definitely make some money by completing online surveys but don't expect to get rich, even if you completed every single one out there. The shorter surveys that take less than 5 minutes pay not as much, while longer surveys that take 15-30 minutes or more, pay much better (anywhere from $1 to $50+). If you made it onto a live person focus group, those could even pay up to $250. Keep in mind that survey payout varies greatly depending on what you qualify for based on your profile and background.

How many surveys will I get?

After you register with a survey agency and fill out a profile listing your demographics, interests, and statistics, the company will usually e-mail you regularly with surveys to complete. The frequency of receiving surveys from the companies varies depending on your demographics. For example, if the company is trying to poll individuals who are home owners, and in your profile you indicated you were a renter, then you won't receive a survey for that issue. But you can generally expect a steady stream of e-mail

By MoneyBlueBook

Sometimes I wonder if I'm the only one that gets a kick out of doing these but I enjoy spending spare time finding ways to make some extra money on the side. For a while now I've been participating in a variety of money making programs like paid online surveys. Most of these programs pay you either points or cash to run their application or fill out their surveys. If you earn points, you can redeem them for gift cards or merchandise after accumulating a certain amount. I've already earned and received several $25 gift cards in the last few months for completing surveys and it gets easier every time. After a while you become very quick and efficient in filling them out, and now they rarely take me longer than a few minutes for even the supposedly long surveys. They key is to register for several and to indicate many interests to qualify for as many as possible.

It's Just For Fun

Yes I know, it's not the best way to spend my time, but it's not like I'm quitting my job and becoming a full time survey filler. :) I do these as a hobby and to pass the time when I'm bored. Most of these online offers are pretty mindless and I can whip through them at work during my lunch or at home during a commercial break. Surprisingly the cash and points add up fairly quickly.

I'll be posting such offers in my Fun Moneycategory (I don't