What Is Compound Interest? | Investopedia

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  • Опубліковано 30 січ 2025

КОМЕНТАРІ • 657

  • @walteruwe9771
    @walteruwe9771 3 роки тому +244

    Nobody can become financially successful over night. They put in background work but we tend to see the finished part. Fear is a dangerous component, hindering us from taking bold steps we need in other to reach our goals.

    • @bartoszdobroslaw9774
      @bartoszdobroslaw9774 3 роки тому +1

      I think it's not always about fear, Sometimes realistic factors discourage people from reaching their goals in life. For instance, I've tried investing in the stock market several times but always got discouraged by fluctuations of stock value.

    • @bartoszdobroslaw9774
      @bartoszdobroslaw9774 3 роки тому

      @maria sandra Oh that sounds good but how do i reach out to Tamara diane hagan ?

    • @bartoszdobroslaw9774
      @bartoszdobroslaw9774 3 роки тому

      @maria sandra OKay i just found her website very impressive and dropped a message for her.,. i hope she reply me.

    • @bishop51807
      @bishop51807 2 роки тому

      So is greed, look out for the two. Con men prey on both fear and greed.

    • @staffsaber534
      @staffsaber534 10 місяців тому

      Dudes after they put a suit on for the first time be like

  • @jacobbourke9591
    @jacobbourke9591 9 років тому +1519

    kinda helped but i'm still gonna fail this test tomorrow

    • @tarik20
      @tarik20 9 років тому +22

      +Jacob Bourke
      Did you fail? What class was it for?

    • @jacobbourke9591
      @jacobbourke9591 9 років тому +59

      I still failed the test but oh well, simple and compound interest it was on

    • @eddy0603
      @eddy0603 8 років тому +70

      Grades are just formality,
      Knowledge is the results of those sacrifices and the one that will be used in the future.
      Did you failed ? Yes. But, did you understood the concept ?

    • @rivermay109
      @rivermay109 7 років тому +12

      Jacob Bourke you're lucky that you had this resource, I didn't when I went to school so... but you have to have basic understanding for it to make any sense.

    • @oso-goodcinema848
      @oso-goodcinema848 6 років тому +8

      I'm watching this math video for science... BECAUSE THAT MAKES SENSE

  • @jaysplace01
    @jaysplace01 8 років тому +583

    what bank has 5% interest on their savings? mines like freaking .004% quarterly

    • @relic1398
      @relic1398 8 років тому +82

      +jaysplace01 Banks used to, 30 years ago. Those days are over.

    • @ChrisWithACam
      @ChrisWithACam 8 років тому +164

      That's why you don't use banks for investing.

    • @jaysplace01
      @jaysplace01 8 років тому +16

      ChrisWithACam i don't its just interesting to hear banks had 5% interest at one point

    • @statisticsisbetter17
      @statisticsisbetter17 8 років тому +41

      That's why you don't use banks for investing ahha.That's the worst.

    • @rafichaudhury8925
      @rafichaudhury8925 8 років тому +40

      Banks aren't going to provide 5%. Investing in diversified index funds are more likely to provide something around that amount. However, funds have up and down years depending on how the markets perform. So at best you can estimate an average annual rate of return, say 5%. That could mean that in one year, the rate of return is -5%, and the year after, it's +15%. On average, that would be 5% over the two years.

  • @Sid3UUays
    @Sid3UUays 4 роки тому +36

    this explained the subject 10 times better than any teacher/textbook ever has

  • @cowanjenkins1823
    @cowanjenkins1823 11 років тому +105

    Investopedia spitting the straight-up truth!!!

    • @seandafny
      @seandafny 10 років тому +1

      lol

    • @LemonChieff
      @LemonChieff 5 років тому

      Makes the maths a lesser pain in the ass

  • @ixaacandyou
    @ixaacandyou 7 років тому +185

    sooo.... in english, its reinvesting your profits from investing

  • @MrClaudiuzz9
    @MrClaudiuzz9 10 років тому +9

    understanding both the power of compound return and the difficultly of getting it is the heart and soul of understanding a lot of things - Charles T Munger

  • @robertmaynez
    @robertmaynez 7 років тому +44

    No a bank will not offer 5% but a mutual fund in the stock market will offer 5% - 10% over time invested monthly. Basically 5-10 cents for every dollar you invest. Whereas bank offer less than 1% 0r less than a penny for every dollar you deposit. Banks can offer 2% in money market accounts but require a "small" $1,000 deposit lol

    • @loftwinglife8843
      @loftwinglife8843 4 роки тому +8

      Meanwhile I have 1k in my savings account and my bank only gives me 11 cents per 3 months. *sad times*

    • @achilleroux8276
      @achilleroux8276 3 роки тому +1

      @@loftwinglife8843 oof

  • @davidyantis659
    @davidyantis659 6 років тому +1

    Sooo... the more tests i fail the less i know on the next test and so on? makes more sense now ty investopedia

  • @xflipsyx9878
    @xflipsyx9878 3 роки тому

    I think that was the best explanation of compound interest out of all the other vids I watched

  • @themafiaman1179
    @themafiaman1179 5 років тому +77

    take a shot everytime this guy says intrest

    • @buttmunch397
      @buttmunch397 4 роки тому +4

      You’d be drunk in 40 seconds

    • @pigbenis2812
      @pigbenis2812 4 роки тому +6

      @@buttmunch397 he already is. That’s why he can’t spell interest.

    • @lofiafterdark9882
      @lofiafterdark9882 4 роки тому

      @@pigbenis2812 😂😂😂😂😂😂😂😂

  • @stanleyramirez4422
    @stanleyramirez4422 6 років тому +23

    Long Term investing through Fidelity or Vanguard at ≈ 12% interest compounded annually.... now thats a reliable millionaire formula

    • @rhdtv2002
      @rhdtv2002 5 років тому +2

      I'm at 17% this year in my Fidelity..

    • @dougruwe288
      @dougruwe288 4 роки тому +1

      What about now? 😂

    • @peter-jm1pu
      @peter-jm1pu 4 роки тому

      Lol. Nice one.

    • @stanleyramirez4422
      @stanleyramirez4422 4 роки тому +1

      @@dougruwe288 Dollar Cost Averaging👌🏼

    • @dougruwe288
      @dougruwe288 4 роки тому

      Stanley Michael Ramirez On sale! I’ll take it.

  • @CoveIllustrates
    @CoveIllustrates 3 роки тому +1

    watching this for a class in 2021, anyone? money money money, ain't it funny, in a rich man's world.

  • @discoverion
    @discoverion 6 років тому +11

    Good video and nice animations. Does a good job of explaining compound interest.
    Reading through the comments I think it's good to note that the interest rate is not the point here. Its more important to understand the principal. There are other videos on where to invest in.

  • @MrAnythingForSelenas
    @MrAnythingForSelenas 2 роки тому +5

    This is really helpful for the simple fact social security retirement might not be a thing in 40 years so we should definitely start by continuing to work harder and start saving this way. Tell you one thing I don't want to be working after 65 when I'm supposed to be enjoying the golden years of my life so I'm definitely going to start with small amount and then let it snowball from there.

  • @dylanmurphy3838
    @dylanmurphy3838 3 роки тому +1

    How do you put that 500 back into the account to earn interest on interest without selling shares? Or do you sell shares to earn compound interest?

    • @jennifertodd6633
      @jennifertodd6633 3 роки тому

      This is the right time to invest in cryptocurrency
      The biggest secret in profiting from forex is by getting a varified trader who really understands the market to trade for you while you take zero risk of losing or blowing your account... inexperienced and inconsistency kills alot of amateur traders hopes.. I personally earn $10,000 every week trading just because someone who understands the market really well is in charge of my trades.... I'm happy to share my success to Mr Donald has a reliable and consistent trader.. he's a genius.

  • @nascentnaomie
    @nascentnaomie 5 років тому +8

    I understand it now. Thank you for this simple educating video

  • @pauln8815
    @pauln8815 8 років тому +20

    very nice video , short , simple and easy to understand ... thank you so much

  • @chickenfeed6272
    @chickenfeed6272 4 роки тому +1

    This says a lot about our society. And yet, we live in one.

  • @jitamdhuvad6342
    @jitamdhuvad6342 4 роки тому

    I truly came for why is compound interest concept is used for formulation of formula of calculating rates of depreciation in written down value method ...(accounting) thx a lot beautiful explanation

  • @InvestingwithKurt
    @InvestingwithKurt 5 років тому +1

    Not the simplest explanation, but good enough :) Compound interest is the best thing you can take advantage of with your savings... If you invest in broad, passive index funds for a long time, you will be a millionaire. It is that simple :)

  • @subzero0057
    @subzero0057 3 роки тому +2

    Gotta love Compound Interest.
    Compound Interest > Simple Interest

  • @draxo6437
    @draxo6437 3 роки тому

    So how do I go about abstain this account to earn this interest asap

  • @allenshaquille8745
    @allenshaquille8745 4 роки тому +46

    Taking the right steps as a beginner in trading requires lots of preparation, developing the skills and using proper risk management which is a psychological torture between fear and greed. My advise is don't lose your hard earned money when there're other ways to simply the process with the help of an experienced financial consultant.

    • @brianrosetti4684
      @brianrosetti4684 4 роки тому +1

      This is just the simple truth not everyone understands the commitment involved while trading and not everyone is ready to lose their money.

    • @bertramknoesen9170
      @bertramknoesen9170 4 роки тому

      It is better to entrust the creation of your trading portfolio to professionals thats to follow a large whale like a small fish.

    • @royalwaves6573
      @royalwaves6573 4 роки тому

      Well said, trading successfully is my goal and I believe anyone trading want to achieve consistent profits.

    • @dylancredence3870
      @dylancredence3870 4 роки тому +1

      Its achievable with the right guide, it can either take up one's lifetime to master or one big push of luck at an extremely opportune occasion.

    • @shilohnovick6115
      @shilohnovick6115 4 роки тому

      How is it going for you? I'll admit that I need help, I can't be on the screen all day.

  • @nirajanpradhan5416
    @nirajanpradhan5416 4 роки тому +1

    Should I invest in mutual fund? Please assist me

    • @joannworden8132
      @joannworden8132 4 роки тому

      Forex trading comes with a lot of timing and thinking and calculations before you can start earning. for beginners it comes with a lot of losses, for amateur more losses and few wins it best you allow professionals trade for you and also learn from them with the help of Mrs Sarah Williams and her broker I have made $55,000 she trustworthy and transparent I have been trading with her over two month now if you are a legit broker and professional forex tradr to start trading with I totally recommend mrs Sarah Willams you can contact her via WhatsApp by clicking this link wa.link/h6eq5w

    • @johnhilljasonscottatgmail
      @johnhilljasonscottatgmail 4 роки тому

      Do you still need help?

    • @nirajanpradhan5416
      @nirajanpradhan5416 4 роки тому +1

      @@johnhilljasonscottatgmail yes

    • @johnhilljasonscottatgmail
      @johnhilljasonscottatgmail 4 роки тому

      @@nirajanpradhan5416 okay! Kindly contact ((jasonscott9998@gmail. com)) he'll help you, I promise!

  • @SillyGoose2024
    @SillyGoose2024 9 років тому +65

    This is why having a 30 r mortgage sucks

    • @Luckbeats
      @Luckbeats 4 роки тому

      Well what else are people going to do

    • @SillyGoose2024
      @SillyGoose2024 4 роки тому +3

      @@Luckbeats if u cant buy outright, then rent.

    • @Luckbeats
      @Luckbeats 4 роки тому +11

      But 99% of people won’t have the money to buy outright and if you’re renting you might as well get a mortgage because it’s going towards YOUR house rather than someone else’s

    • @hithere1036
      @hithere1036 4 роки тому +1

      Depends an awesome thing if investing in real estate more cash flow

    • @SillyGoose2024
      @SillyGoose2024 4 роки тому +5

      @@Luckbeats very little goes to paying your house. Something like 25% of your mortgage payment each month actually goes to paying off the house. The rest goes to taxes, escrow and interest. And anything goes wrong with the house ( and it will , often) the homeowner is responsible. Not the renter

  • @majestically2008
    @majestically2008 4 роки тому +2

    Brilliant. I understand it now!! Many thanks. 😁😁👍👍👍

    • @joannworden8132
      @joannworden8132 4 роки тому

      Forex trading comes with a lot of timing and thinking and calculations before you can start earning. for beginners it comes with a lot of losses, for amateur more losses and few wins it best you allow professionals trade for you and also learn from them with the help of Mrs Sarah Williams and her broker I have made $55,000 she trustworthy and transparent I have been trading with her over two month now if you are a legit broker and professional forex tradr to start trading with I totally recommend mrs Sarah Willams you can contact her via WhatsApp by clicking this link wa.link/h6eq5w

  • @GothicDarkhellrazor
    @GothicDarkhellrazor 10 років тому +8

    I need to do this when i start working.

  • @YamadaMarketing
    @YamadaMarketing Рік тому

    Simple and easy to understand. Goodjob 😊

  • @evajenkins1728
    @evajenkins1728 10 місяців тому

    good teachings. makes you think

  • @OllertonMD
    @OllertonMD 6 років тому +8

    this would have been a bit more powerful if you contrasted compound interest at 3 years vs 30 or even 50 years, since the real magic occurs decades down the line.

    • @rhdtv2002
      @rhdtv2002 5 років тому +3

      Agreed. I did that with my 10 yo son with a simple 100 a month over 40 years...with a modest return of 6%..he was floored. Then I showed him a few thousand a year and he told me when he could invest..lol

    • @moldymoss3991
      @moldymoss3991 3 роки тому

      @@rhdtv2002 Your son can starting investing at any age, even if he's under 18. Take advantage of a custodial account. I'm 15 and I love getting dividends!

  • @alexanderbreschi90
    @alexanderbreschi90 4 роки тому +1

    Yes this is good in theory but how do we apply it to the stock market? Let’s say the stock you have grow in price, you can’t do anything with that growth until you sell it, but if you sell it and go and want to buy more with the difference between what you paid and what is worth now you can’t because the price is obviously higher. it’s a rhetorical gain. The only thing you could do is use the dividend the distribuite (if they do) to buy more of that stock, is that what you mean? Please help me understand, when you say the stock market grows let’s say 10% you don’t get that 10% to reinvest it and use the compound interest do you? I don’t know how in practice to follow that exponential increase of earning interest on interest.

    • @MrsGG-id1os
      @MrsGG-id1os Рік тому

      I agree with you. Theory vs Practice is so hard to dicipher. Did you figure it out?

  • @scottmillion8954
    @scottmillion8954 9 років тому

    This is very true so is the possibility of finding a vehicle that offers 5% interest or more to offset inflation. I personally own 2 separate accounts that have this formula working for me. 1 has a 15% cap but a .75% floor and the other a 12% cap and 0%. Both are doing very well and I'm not exposed to market risk or taxes

    • @harrycq81
      @harrycq81 8 років тому

      Hey Scott, can you break that down in English for me? Lol, I'm trying to learn compound interest. Thanks!

  • @SkateShootScore
    @SkateShootScore 7 років тому

    So how do I apply this ? Every month I put money in to index fund and at the end of the year invest will be received or grow and I just leave it there ?

  • @billclinton-f8n
    @billclinton-f8n Рік тому +235

    I find myself at a crossroads, uncertain whether to liquidate my $250,000 stock portfolio. I'm seeking advice on the best strategy to capitalize on this current bear market.

    • @devereauxjnr
      @devereauxjnr Рік тому +2

      Investing in stocks can be a wise decision, especially if you have a reliable trading system that can lead you to fruitful days of success.

    • @viewfromthehighchairr
      @viewfromthehighchairr Рік тому

      @@devereauxjnr Factos!! Since the market became extremely volatile and pressure increased (I should be retiring in 17 months), I took the decision to work closely with a financial advisor. It has already been 9 months and counting, and I have made approximately 600K net from all of my holdings.

    • @AlbertGReene-p8w
      @AlbertGReene-p8w Рік тому +3

      @@viewfromthehighchairr That's impressive! I could really use the expertise of this advisor.

    • @viewfromthehighchairr
      @viewfromthehighchairr Рік тому +6

      @@AlbertGReene-p8w credits to NICOLE DESIREE SIMON, one of the best portfolio manager;s out there. she;s well known, you should look her up

    • @AlbertGReene-p8w
      @AlbertGReene-p8w Рік тому

      @@viewfromthehighchairr Thanks for the info, i found her website and sent a message hopefully she replies soon.

  • @elizabethcrestwood3923
    @elizabethcrestwood3923 5 років тому +39

    Long term investments adds up to making interests bigger. I started investing in the last quarter of 2019,and I've garnered a cumulative of about $380k from my $20k investment. One other notable factor for interest depends on the portfolio and the commodities involved.

    • @nguyenpeter4035
      @nguyenpeter4035 5 років тому

      What are the agreements of the Portfolio with which you trade with? I used to trade with a manager who takes a 30% Brokerage commission from me for his Brokerage platform.

    • @elizabethcrestwood3923
      @elizabethcrestwood3923 5 років тому

      @@nguyenpeter4035 Yea.

    • @elizabethcrestwood3923
      @elizabethcrestwood3923 5 років тому +4

      Your manager would have probably been working for a platform and that's understandable for the commission.
      Whereas I trade with an Independent Broker Certified by the FINRA body. He takes 15% renumeration at the end of trading cycle from my ROI.

    • @elizabethcrestwood3923
      @elizabethcrestwood3923 5 років тому

      %benfredricky@gmail--com:% -

    • @elizabethcrestwood3923
      @elizabethcrestwood3923 5 років тому

      +44 2030954603

  • @martinsandoval2726
    @martinsandoval2726 4 роки тому

    Where do you go to get an account to get compound interest?

  • @castrorincon6179
    @castrorincon6179 3 роки тому +4

    Success is dependent on the action or steps you take to achieve it. Show me a man who doesn't have an investment and I will tell you how soon he'll go broke. Investment is building a safe haven for the future: with the right choice of investment that has at least 1% minimum risk and with an Expert guidance, profit and interest should be 💯 guaranteed.

    • @jerryassam2040
      @jerryassam2040 3 роки тому +3

      I agree with you 💯... I had a senior colleague at work who was doing well but never had an investment. Unfortunately he lost his job and went from living a comfortable life to hardship. There would had been something to fall back on if he had an investment

    • @jerryassam2040
      @jerryassam2040 3 роки тому +3

      So I agree with you 💯

    • @harrisonjerry813
      @harrisonjerry813 3 роки тому +3

      @@jerryassam2040 This makes so much sense, just like he said, for someone to invest, the person should be consider an appropriate choice of investment with limited risk level. I encourage anyone to do same with the help of an expert.

    • @harryroland9333
      @harryroland9333 3 роки тому +1

      @@jerryassam2040 Speaking of investing, forex trading is the best business in the world right now with the ever raising amount of bitcoin. I know a couple of friends who makes a lot of money weekly trading the financial market

    • @sagazmelvin9380
      @sagazmelvin9380 3 роки тому +1

      For anyone building for posterity I think crypto is the next gold but the problem is scammers are everywhere.

  • @seththomas942
    @seththomas942 10 років тому +6

    It's all simple now; thank you

  • @vilmospalik1480
    @vilmospalik1480 4 роки тому

    thnx really helped my brain I see all these epic videos on the side of my screen but I gotta stay focused on the video and yours is snappy colourful and got to the point

  • @thedoomslayer4192
    @thedoomslayer4192 3 роки тому +1

    The missile knows where it is at all times. It knows this because it knows where it isn't. By subtracting where it is from where it isn't, or where it isn't from where it is (whichever is greater), it obtains a difference, or deviation. The guidance subsystem uses deviations to generate corrective commands to drive the missile from a position where it is to a position where it isn't, and arriving at a position where it wasn't, it now is. Consequently, the position where it is, is now the position that it wasn't, and it follows that the position that it was, is now the position that it isn't. In the event that the position that it is in is not the position that it wasn't, the system has acquired a variation, the variation being the difference between where the missile is, and where it wasn't. If variation is considered to be a significant factor, it too may be corrected by the GEA. However, the missile must also know where it was.

  • @user-ww6ii6zn8m
    @user-ww6ii6zn8m 5 років тому +4

    Awesome video! Compound interest is so important for achieving long term wealth!

  • @kaadirduran
    @kaadirduran 5 років тому

    Lets say i made 5% on stocks. I bought it at 10 and sold it for 10.5. Now i am going to reinvest my 10.5 in the same stock, but it doesnt cost 10 any longer?

  • @dresmoove7506
    @dresmoove7506 5 років тому

    So why is compound interest a good thing ? For a few extra dollars or wat ? Im new & learning the ropes of investing that’s all

    • @jakerubin2250
      @jakerubin2250 5 років тому +1

      Look up warren buffet. He uses that same principle and is growing Berkshire Hathaway at an insane speed. I think he’s gained over a billion dollars in net worth this past year and he’s worth just under $90 billion I think. In the beginning the interest may not seem like much, but in the long run I guarantee you’ll be impressed with the large amounts of money you’re making.

  • @ttv_Akiixo
    @ttv_Akiixo 3 роки тому +1

    Here because our teacher is making us rewrite the entire course as a culminating/final assessment.
    not even halfway done, and its due in 33 minutes 💅

  • @nazifataha8868
    @nazifataha8868 4 роки тому +1

    Thanks for explaining it so clearly.

  • @ReplayKCF
    @ReplayKCF 9 років тому

    ok what im wondering is lets say i start saving money now and i put 30 dollars in a savings account and slowly add money to it unil I reach 1000 dollars till the end of the year will the interest be calculated upon the initial (principal) 30 dollars or will i get an interest of the 1000 dollars? what if I have 0 dollars in the savings account for the whole year but put in 5000 dollars on the 31th of December? And if I put in the initial 10.000 dollars for the compound interest, does the bank lock that money for the coming 3 years?

    • @dankean7932
      @dankean7932 9 років тому

      +The Jackal The bank calculates on on a daily basis & pays monthly. The example above is being paid 5% annually. Where as a normal bank account is paid Monthly. So your interest would actually compound more over time than the example above.

  • @themafiaman1179
    @themafiaman1179 5 років тому

    whats the song in the background?

  • @wheelieboychhayank
    @wheelieboychhayank 4 роки тому +1

    Superb and very clear video. Thank you for such great explanation. Keep educating 🙏🏼

  • @OneBrokeBloke
    @OneBrokeBloke 3 роки тому

    Such professionel explanation but kind of ruined by 360p

  • @manthan1994
    @manthan1994 6 років тому

    Goddammit this the thing which i ws looking for.. Its been whole day I was not understanding this fucking concept and i found this little video.. Very thankful.

  • @pedrommundim69
    @pedrommundim69 8 років тому

    Great video thank you so much. By the way, which software was used to create those cool drawings on your presentation while the video was playing. That was great .

  • @DanielRodriguez-ob1pv
    @DanielRodriguez-ob1pv 2 роки тому

    How did you get to the 11,025 can someone let me know

  • @SolidSnakeAce
    @SolidSnakeAce 6 років тому

    does compounding interest also apply in mutual fund?

    • @rhdtv2002
      @rhdtv2002 5 років тому

      Yes..the real magic usually happens once you have 100K in your 401k..

  • @---bk2hj
    @---bk2hj 4 роки тому

    Excellent Excellent Excellent experience

  • @djpitr
    @djpitr 5 років тому +3

    Put it in Roth IRA . Self Directed !! And buy some stocks that have 5% dividend , set it automatic dividend reinvestment :) simple , and you are in full control,and no fees

    • @francisoduori6316
      @francisoduori6316 4 роки тому +1

      What country and how does this work?

    • @djpitr
      @djpitr 4 роки тому

      Francis Oduori US , here government let u create Roth IRA ( investment retirement account) they allow you put in $6000 per / year , and you pay zero taxes on the gains when you pull it out at 65

  • @SmashKing17
    @SmashKing17 5 років тому

    Super easy explanation! Nailed it
    👍

  • @breeedmonds8634
    @breeedmonds8634 10 років тому +2

    Wait, I'm confused. I'm doing this for financial lit class and so as I was doing the math, I ended up getting 11,576.25. How was he able to get 1,576.25 if I got 11,576.25?

    • @eccentrictrolling3481
      @eccentrictrolling3481 8 років тому

      He stated the amount of money you earned through interest, you stated the total amount of money in his account after 3 years of compound interest.

    • @TimeLessEntityT0
      @TimeLessEntityT0 7 років тому

      To understand compound interest- on how it builds on-top of itself month after month- here are your monthly payments rising month after month.
      $40.74
      $40.91
      $41.07
      $41.24
      $41.41
      $41.58
      and continue down until months 34, 35, 36
      $46.59
      $46.78
      $46.97

  • @darklordhyper
    @darklordhyper 5 років тому

    Thanks for this video! It's going to help me for my scholarship exam!

  • @vsatishkumar4900
    @vsatishkumar4900 5 років тому

    very nice explanation man

  • @SimpleIdeasAcademy
    @SimpleIdeasAcademy 3 роки тому +1

    “He who understands it, earns it; he who doesn't, pays it” - Albert Einstein

  • @keel8330
    @keel8330 7 років тому +1

    Thanks for the video! Great quality!

  • @bestsellerwithkitong
    @bestsellerwithkitong 4 роки тому

    I'm searching more about how compounding interest works as I learned that the 5% you earn annually from mutual funds or stocks, can be earn monthly thru compound investment by investing in fx.

  • @NikolaZagorac
    @NikolaZagorac 4 роки тому

    So... if I understand this correctly, it's just borrowing someone money and saying that the interest is x% and over y time the interest becomes greater by x%. Right?

    • @linearmemories
      @linearmemories 4 роки тому

      The Chronitic not quite lol

    • @NikolaZagorac
      @NikolaZagorac 4 роки тому

      @@linearmemories Can you explain then?

    • @vm3699
      @vm3699 4 роки тому

      No it's like the money you borrowed is x , for y interest say for 5 years . The first year your money is (x+y) the second year it is (x+y)+y% of the (x+y) ... So it goes on and on like that

    • @linearmemories
      @linearmemories 4 роки тому

      @@NikolaZagorac
      If you put $100 into a bank account with 5% compound interest per year, you will end the year with $100 + 5%, or $105. The next year, however, you will end with $105 + 5%, or $110.25. The first year, you were given $5 in interest, while the second year you were given $5.25 in interest; that is compound interest.
      Without compound interest, you would gain $5 every year, because 5% of your initial deposit of $100 will always be $5.
      This may seem like an insignificant difference - $0.25 over the course of an entire year - but when this is done on a large scale, individuals may be able to generate ever-growing and livable income.
      Just to hammer the point home, if your initial deposit was $1,000,000 and the bank offered a 5% compound interest rate per year, you would end the year with 1,000,000 + 5%, or $1,050,000. After the second year, you would end with 1,050,000 + 5%, or $1,052,500. The second year you made $52,500 as opposed to the first year where you made $50,000.
      You can imagine what this value would be after 10, 20, or 30 years.

  • @nicorengifo5374
    @nicorengifo5374 6 років тому

    I understand compound interest but i do not understand how compount interest can be obtained in the stock market if stock prices give you simple interest returns.

  • @Artair2009
    @Artair2009 8 років тому +22

    where the heck can you get a 5% interest savings account?

    • @nicorengifo5374
      @nicorengifo5374 6 років тому +2

      Its hypothetical

    • @simulationking950
      @simulationking950 5 років тому +1

      Nepal it's 10.25%

    • @lionelkart646
      @lionelkart646 5 років тому +1

      In india

    • @SprSamson_
      @SprSamson_ 4 роки тому

      Some fixed term savings accounts do but you start with a balance of zero is it drops hugely after a year.

  • @kpopfan9550
    @kpopfan9550 4 роки тому +9

    Had to watch this for a homework I was doing and I don't know why, but the music reminds me of Spongebob haha

  • @SmarterLinking
    @SmarterLinking 4 роки тому

    Great Video I like what you’re Sharing Keep up the Good Work #LinkingMoney

  • @omar-eduardobarriga1856
    @omar-eduardobarriga1856 8 років тому

    this was like... the most helpful video i have watched in a while. my math professor doesn't explain shit so i had no idea what was the difference between compound interest and simple interest

  • @victorelnecave5157
    @victorelnecave5157 4 роки тому +1

    Are invest of compound interest?

    • @joannworden8132
      @joannworden8132 4 роки тому

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  • @staceyblunt5678
    @staceyblunt5678 7 років тому

    Simple video, but great content!

  • @marriedyoung7579
    @marriedyoung7579 6 років тому +1

    Great video

  • @koreyjf8095
    @koreyjf8095 2 роки тому

    how does this work if all my stocks go down everyday

  • @joshancheta1248
    @joshancheta1248 4 роки тому

    The visuals helped, thank u so muc

  • @tayjianyao381
    @tayjianyao381 6 років тому +2

    Thank you for this simple yet helpful video, appreciate it

  • @piggyRF
    @piggyRF 3 роки тому

    10/10 Video👍

  • @lolylolay
    @lolylolay 11 років тому +1

    Great Video!

  • @srdbadchad1926
    @srdbadchad1926 3 роки тому +7

    Who else here because a teacher gave the link?

  • @maxwell_isnt_here
    @maxwell_isnt_here 3 роки тому

    I’m still confused. Can someone explain?

  • @javierkratos1
    @javierkratos1 3 роки тому +1

    for some reason this reminds me jurassic park I think its the music or narrator

  • @copacelu93
    @copacelu93 11 років тому +1

    great video!

  • @OkcStarX
    @OkcStarX 2 роки тому

    How do you find or find out if your bank offers this? Like i dont even believe this saving accounts exist lol best i found was 2.5% and pretty sure its not compounding

  • @jacobcooley8052
    @jacobcooley8052 8 років тому

    its really simple(wink), you borrow 10k at 4% interest, then you put it into a stable investment that pays 7% . Then return the borrowed money, pay the interest and your left with 3% in profit or $300. then create an LLC, pitch your success to investors who will loan you a billion dollars and make 30mil from the same process. repeat if necessary.

  • @evanballard983
    @evanballard983 3 місяці тому

    Cuh why this feel like the episode where spongebob learns about the patties? But in irl 😂

  • @TrentRichards
    @TrentRichards 9 років тому

    Simple but powerful

  • @lexisrez2895
    @lexisrez2895 10 років тому

    This is a great video. I just don't know where a teenager like myself should start. What banks or accounts can I open to start saving? Anyone, help. It woyld be greatly appreciated.

    • @user-rg6ze7gu3n
      @user-rg6ze7gu3n 10 років тому

      Read "Rich Dad Poor Dad" by Robert Kiyosaki....another option besides saving is investing(stocks, bonds, etc.)

    • @danv.1212
      @danv.1212 9 років тому +2

      Alex Perez if you can, look at investing your money in a Mutual fund or Index fund as Bonds and Certificates of Deposit (or CD's) often yield a smaller percentage of interest compared to a well balanced/diversified Mutual fund. Hope that helps. P.s. If you can invest a total of $17,050 by the time you are 30 years old, 35 years pass by and you'll have just over $1,000,000.00 (even if you never invested another penny). :)

    • @TOMMMME
      @TOMMMME 9 років тому

      Daniel Anthony How did you go from $17,050 to $1,000,000? What type of investment did you use to create that? Would you please explain? Thank you

    • @Sulfen
      @Sulfen 9 років тому +1

      Don't go to a big bank like Wells Fargo or Bank of America. Instead go to an online bank like Ally. Their interest rates on savings and CDs are better and they compound daily on the savings.

    • @marcrogue5268
      @marcrogue5268 9 років тому

      +Sulfen lol daily compounding makes little difference

  • @dxelson
    @dxelson 4 роки тому +1

    Simple and easy to understand! Thanks

  • @dagoku4892
    @dagoku4892 6 років тому

    Thank you. This was very helpful.

  • @mhdelmurad2165
    @mhdelmurad2165 5 років тому

    شكرا كثيرا يا صاحبي

  • @o.c.2470
    @o.c.2470 7 років тому +1

    yes, but where can compound interest be established? MMA? CDs? Mutual Funds?

  • @patienceagbey1402
    @patienceagbey1402 Рік тому

    Compounding is like a cheat code for money

  • @noahcoles6903
    @noahcoles6903 4 роки тому +5

    Am i just crazy or does this man sound like SwaggerSouls??

  • @lanapshtiwan2117
    @lanapshtiwan2117 7 років тому

    Very useful.

  • @greywildon4061
    @greywildon4061 4 роки тому +25

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      @jenniferwilson9898 4 роки тому +3

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    • @coryprinceton7930
      @coryprinceton7930 4 роки тому +1

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    • @catharinemarlia6728
      @catharinemarlia6728 4 роки тому +1

      Nice graphic.

    • @alicearthur2566
      @alicearthur2566 4 роки тому +1

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    • @mikemorgan3938
      @mikemorgan3938 4 роки тому +2

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  • @LamTran-sw6yz
    @LamTran-sw6yz 7 років тому

    What happens if you put, $100 in for the compound interest, every day, for 1 year,
    After 1year compound interest, you have to pay all the money back, or keep your money, when I'm compound interest every day for 1year compound interest.

  • @SavingsMinusDebt
    @SavingsMinusDebt 11 місяців тому

    Compound interest is positive and negative. He who understands compound interest, earns positive compound interest ... he who doesn't ... pays negative compound interest. -SMD

  • @davorluke1777
    @davorluke1777 8 років тому +2

    Muy buena explicacion, exelente

  • @hongweisun3981
    @hongweisun3981 2 роки тому

    love this video

  • @haquehaque4027
    @haquehaque4027 6 років тому +5

    Albert einstein : Compound Interest is the eighth wonder of the world. He who understands it, he earns it
    He who doesn't, pays it.

  • @teatevinponder7130
    @teatevinponder7130 5 місяців тому

    Two thumbs up!! Thanks bloak! (::