Because who needs a social life when you can have a 5% annual return?
Inflation: The Silent Savior of SavingsImagine you have $1,000 in a savings account earning 5% compound interest per year. Sounds good, right? Wrong. After one year, you'll have $1,050. But wait, it gets worse. In year two, you'll earn 5% on $1,050, not $1,000, so now you're up to $1,102.50. And don't even get me started on the math involved in calculating compound interest on a 30-year mortgage.
Compound interest is the ultimate get-rich-quick scheme. It's like having a magical friend who just keeps giving you more money for free. But is it too good to be true?
Let's talk about the dark side of compound interest. Like, have you seen the fine print on those 5% certificates of deposit (CDs)? It's like they're trying to hide something from you.
What Are CDs and Why Aren't They Just Plain Old Savings Accounts
Don't get us wrong, compound interest is still the best way to grow your money, but don't be naive. There's always a catch.
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