Compound Interest In Investing

Compounding is the process of generating more return on an asset’s reinvested earnings. To work, it requires two things: the reinvestment of earnings and time. Compound interest can help your initial investment grow exponentially. For younger investors, it is the greatest investing tool possible, and the #1 argument for starting as early as possible.

 

Compound Interest in Investing

There is a common trait among those who obtain and retain great wealth over a long period of time. This trait is the appreciation of the awesome power of compounding investment returns. It is the source of the colossal wealth of major banks, insurance, and credit card companies in most parts of the world. Those who develop this appreciation, especially when they were young, have an excellent chance of becoming prosperous.

Using compound interest to invest can be done in so many ways and in different windows of investment that are available to humans. For instance, you may use this system by setting aside a given amount of money and re-invest it over time, or you may choose to keep on adding more funds into the investment over time.

 

Any serious wealth builder cannot afford to ignore the power of compound interest. If you chose to go the way of compounding, results might appear unimpressive in the early years. Of course, there will always be trinkets, expensive cars and luxuries to lure you from your plans. But, think about this: compound interest is like a daredevil ride in an amusement park. It often starts slowly but ultimately reaches tremendous pace and never stops accelerating. Similarly, the joys of financial freedom far exceed the momentary pleasures of buying all the latest toys. It is definitely worthwhile to persist.

 

How to benefit from compound interest in investing

  • Start investing early using whatever funds available to you – even is it is just $100. Do not procrastinate as this holds you back.
  • Learn to be content with satisfied with reasonable rates of return. If you want to chase high returns, it may cause you to take bigger risks with your money.
  • Have a plan that allows you to save at least 10% of your take home pay for investment every month. Setting up an automatic payroll deduction monthly is an excellent way to accomplish your goals.
  • Try to pay off your home mortgage as soon as you can. And if possible, go for an open mortgage with no prepayment penalties. The sooner you pay off your mortgage, the less interest you pay.
  • Also, try not to put yourself in credit card and other high-interest debt. They could become compounding working against you.

Start investing early for your children, preferably at birth. Investing early enhances your compounding returns.

Check out the following calculator to see how the compound interest can be used to estimate the future value of current investments!

https://www.nerdwallet.com/banking/calculator/compound-interest-calculator

 

 

 

 

 

Hillary Clinton and Donald Trump’s Stance on Current American Education

In 2016, the presidential candidates still press for accountability for students’ performance and debate the federal government’s role in education, but the higher profile issues are student loan reform and making college more affordable—even tuition-free—for some students.

Democratic candidate

Hillary Clinton
On July 6, 2016, Hillary Clinton introduced a new student loan reform policy to decrease the indebtedness of college graduates. To be implemented over five years, students from families with a combined income of $125,000 or less would be able to attend in-state public colleges without paying tuition. For families earning less $85,000, the plan would be effective immediately. Graduates would also be able to defer their loans after graduation for three months.

On July 5, 2016, Clinton addressed members of the National Education Association, the nation’s largest teachers union. In a speech, she said, “If I am fortunate enough to be elected president, educators will have a partner in the White House, and you’ll always have a seat at the table.” She was cheered for “calling for less standardized testing, more support for vulnerable children and more respect and pay for public school educators,” but members of the audience booed when she discussed her support for charter schools. Clinton said, “When schools get it right, whether they’re traditional public schools or public charter schools, let’s figure out what’s working and share it with schools across America. Rather than starting from ideology, let’s start from what’s best for our kids.”

In the transcript of Clinton’s roundtable with the American Federation of Teachers November 9, 2015, Hillary Clinton stated her opposition to connecting teacher evaluation and pay to test outcomes. She also said that charter schools should be “supplementary, not a substitute” for excellent public schools.

During a town hall meeting on November 7, 2015, Clinton expressed her support for public schools and discussed the role of charter schools. She said, “I have for many years now, about 30 years, supported the idea of charter schools, but not as a substitute for the public schools, but as a supplement for the public schools. And what I have worked on through my work with the Children’s Defense Fund and my work on education in Arkansas and through my time as first lady and senator is to continue to say charter schools can have a purpose, but you know there are good charter schools and there are bad charter schools, just like there are good public schools and bad public schools. But the original idea, Roland, behind charter schools was to learn what worked and then apply them in the public schools. And here’s a couple of problems. Most charter schools — I don’t want to say every one — but most charter schools, they don’t take the hardest-to-teach kids, or, if they do, they don’t keep them. And so the public schools are often in a no-win situation, because they do, thankfully, take everybody, and then they don’t get the resources or the help and support that they need to be able to take care of every child’s education. So I want parents to be able to exercise choice within the public school system — not outside of it — but within it because I am still a firm believer that the public school system is one of the real pillars of our democracy and it is a path for opportunity.

In a statement released October 24, 2015, Clinton voiced support for the Obama administration’s plan to eliminate unnecessary standardized testing. She wrote, “While testing can provide communities with full information about how our students are doing and help us determine whether we have achievement gaps, we can and must do better. We should be ruthless in looking at tests and eliminating them if they do not actually help us move our kids forward.

Republican candidate

Donald Trump

On September 8, 2016, Trump delivered a speech on education policy in Ohio. He said, “As your president I will be the nation’s biggest cheerleader for school choice. I understand many stale old politicians will resist, but it’s time for our country to start thinking big and correct once again.” He proposed allocating $20 billion towards school choice policies. In his speech in Ohio, Trump also commented on the issue of merit pay for teachers, saying, “I will also support merit pay for teachers so that we reward our best teachers instead of the failed tenure system that rewards bad teachers and punishes the good ones.

Trump gave a speech at the American Legion national convention in Ohio on September 1, 2016, where he discussed his goal of promoting patriotism in U.S. schools. Trump said, “Together, we are going to work on so many shared goals. But I want to begin by discussing one goal that I know is so important to all of you: promoting American pride and patriotism in America’s schools. In a Trump Administration, I plan to work directly with the American Legion to uphold our common values and to help ensure they are taught to America’s children. We want our kids to learn the incredible achievements of America’s history, its institutions, and its heroes. We will stop apologizing for America, and we will start celebrating America. We will be united by our common culture, values and principles – becoming One American Nation…one country, under one constitution, saluting one American Flag. The flag all of you helped to protect and preserve. That flag deserves respect, and I will work with American Legion to help to strengthen respect for our flag – and, by the way, we want young Americans to recite the Pledge of Allegiance.”

In an interview on January 11, 2016, with The Wall Street Journal, Donald Trump said he would do “tremendous cutting” of the federal government. Education policy, he said, should be returned to the states, and he said he would end the Common Core education standards, which conservatives view as federal overreach. “Education should be local and locally managed,” said Trump.

Asked about the Common Core during a radio interview with Hugh Hewitt in February 2015, Trump said, “I think that education should be local, absolutely. I think that for people in Washington to be setting curriculum and to be setting all sorts of standards for people living in Iowa and other places is ridiculous.”

OVERVIEW OF CANDIDATE POSITIONS

Hillary Clinton opposes connecting teacher evaluations and pay to test outcomes, supports universal preschool and higher teacher pay, and calls for student loan reform.

Donald Trump supports returning education policy to the states and doing away with Common Core education standards.