Albert Einstein called compound interest the “eight wonder of the world”. Compound interest works like magic, with your money constantly feeding on itself to grow larger and larger. How does it work? It’s simple really. Interest is earned and paid not just on your principal, but also on all the previous interest earned. Your total balance grows faster and faster without you doing a thing — except pulling your money out! Compound interest is one of the secrets of putting your money to work for you.
Interest payments you make to your children in FamilyMint work on this simple principle of compound interest. That is, interest is calculated based on your child’s total approved balance which includes all the previous interest deposits made. If you decide to provide interest payments to your child, be sure to take advantage of the opportunity to paint this powerful mental picture for them.
Want to learn more about compound interest? Check out The Magic of Compound Interest at http://www.finweb.com/investing/compound-interest.html.