I recently received this question from an interested reader:
What is compound interest?
This is a great question that takes us back to Money 101.
Compound interest is an interest charge on both the principal of a loan and the interest. This means that the interest charge is added to the balance of the loan, and you are charged interest on both. (Simple interest, by contrast, is charged only on the principal of the loan.)
One of the reasons that credit card debt is so hard to pay off is that it works on compound interest. Not only that, but credit card interest charges …read more

While yielding wealth and building a solid financial base has its finer points, the fact of the matter is that the whole concept can be whittled down to 3 main keys. It is important to understand these three things if you want to understand how you can begin to build wealth:

SAVE. This is one of the most important items. You have heard again and again: “Pay yourself first.” Well, it’s true. You should start out by paying yourself first. If you have the ability, you can have some of your money directly deposited into a savings account. Do this. It …read more