Compound interest: The lazy way to get rich

By Deputy editor Tim Bennett Nov 25, 2011

Tim Bennett

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Tim Bennett explains the magic of compound interest. Compounding, or or the 'time value of money' - is one of investing's most vital concepts, and is the secret to getting rich without really trying.

 

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• Watch all of Tim's video tutorials here

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Published in Video tutorials | More articles by Tim Bennett

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  • 1. Colin Selig-Smith

    (25 November 2011, 06:39PM)  Complain about this comment

    Good video.


    This one also has some simple tricks which help you determine how fast your money will grow. Doubling time for example.

    http://www.youtube.com/watch?v=F-QA2rkpBSY

    "The greatest failing of the human race is the inability to understand the exponential function" - Dr. Alfred Bartlett

  • 2. Trenchant1

    (03 December 2011, 12:07PM)  Complain about this comment

    I'm surprised that you don't mention the devastating effect of taxes on savings. Also, you mention inflation only in passing. You need very high returns to cover these rapacious robbers. Where are you going to get them? When inflation is running at 5%, what is the point of saving at 5% and then having to pay tax on your 'earnings'? The best you can hope for is to maintain the value of your money, isn't it? The truth is that whatever the government tells us, inflation is higher than any rate of interest offered by any widely offered, safe investment offered by the banks.
    The theory of compound interest is very exciting but not very easy to put into practice when the state is constantly out to grab what it considers its share through tax and inflation.

  • 3. Impromptu

    (27 December 2011, 05:23PM)  Complain about this comment

    Great series of videos Tim, and I'm recommending them.

    It occurs to me that a little piece on the "rules of 72 and 69" might make a useful adjunct to this. Quick, convenient, low-maths estimates for compound doubling.

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