• General 02.09.2019 Comments Off on Financial Education For Children – Do Your Children Know The Incredible Power Of Compound Interest ?

    Independent of income level a person to achieve in his life, has been shown statistically that less than 20% reach retirement without having to lower their standard of living. Something must be wrong. Something must be lacking in the education of a human being if it is unable to prepare financially for their old age after working a lifetime. And it is because they never had enough money to invest and preventable. It is a myth that requires money to make money. In recent months, Boy Scouts has been very successful.

    What is needed is to know how to multiply. And it does not require great skills to do business. Only requires discipline, patience and rigor. Albert Einstein said the greatest invention of man is compound interest. What is compound interest? It is named for the process of capital to accumulate the interest it produces, so that interest in turn generate interest. Allowed to accumulate great wealth from small amounts of money invested for a long time. This is how a young person of 20 years may reach several million U.S.

    dollars at age 60 if they are diligent in investing approximately $ 80 per month or $ 20 per week to 10% annually. A capital of 1,200,000 pesos after 5 years and a compounded annual rate of 8% was converted to 1,763,194 pesos. Another very good example of the power of compound interest is reflected in a pension reform that is about to be implemented in Chile: On July 1 each mother will receive $ 297 000 for each child born alive, a figure which will be given an annual return estimated 5.5%. According to official estimates, a 35 year old woman with three children receive $ 4.4 million at age 65, age at which you can withdraw funds. (El Mercurio, June 22, 2009) It is simply invest the money so you can multiply instead of spending it. And there lies the problem: we like to spend! To the extent that we spend what we have. Most people live so indebted that have compound interest working against them – in favor of banks and financial institutions. And even bigger problem is that they are teaching their children! Living a lifestyle beyond our means and spend just one month to another is a bad example for them. Why not make a change today? Why not restricted, plan a budget with them, stick to it and explain that saving is more important to invest this month that the shoes or the new mouse for your computer? You should save at least 10% of their monthly income. Teach your children that it is good temporarily restricted in order to get ahead. Show them with these numbers, black on white, as you can multiply the money instead of just living expenses until nothing remains. At first they will bother, especially if they have been very spoiled, but when they grow up they will be appreciated. They will have learned the valuable lesson of saving and how a more austere lifestyle lately today will lead to abundance in the future. If you need help with education financial support from their children, I urge you to where you will receive a free virtual book that will teach you 10 facts you can teach your children about how to develop their entrepreneurial skills and have their own businesses.

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