If you choose to ignore Compound Interest, you might as well call it the Greatest Mistake you’ll ever make. Compound interest is a powerful tool for building wealth. It’s also a devastating tool that can destroy wealth.

It just depends on which side of the financial equation you use it.

The BIG mistake most of us make when it comes to paying back debt is we simply make the minimum payments.

Then we use any additional money we have to make additional contributions to our 401K, save it in a low-interest “rainy day” fund, or invest it in the stock market.

But, unless your returns from these endeavors match or beat the embedded interest rate within your debt — then financially, you’re still worse off.

Let me explain using an example.
Let’s say you theoretically have…

1. Car payments of $585 per month with a loan balance of $1,500 at an interest rate of 3.25%

2. Student loan payments of $647 per month and your loan balance is $63,000 at an interest rate of 6.75%

3. And just ONE credit card with a payment of $225 per month, loan balance $4,700 and the interest rate is 21.9%

Note that we have a combined debt total of $86,200 and $1,457 in debt payments each month. Do you know how much of that $1,457 payment goes to just paying off interest?

$490 (33.65%)!!

That figure is what’s known as your embedded interest rate. It’s the sum total of interest you pay on your combined debt. Want to see the math? Divided your monthly interest paid $490 by your monthly payment $1,457.

This works every time!

Now, here’s my question to you…

The secret to building wealth is stop giving away your Lifestyle Money to the banks and lending institutions.

Take out a $20 bill from your wallet and rip off a third or more — that’s about how much of your after-tax income could be going to interest every year!

If you choose to ignore Compound Interest, you might as well call it the Greatest Mistake you’ll ever make. Compound interest is a powerful tool for building wealth. It’s also a devastating tool that can destroy wealth. It just depends on which side of the financial equation you use it.

The BIG mistake most of us make when it comes to paying back debt is we simply make the minimum payments. Then we use any additional money we have to make additional contributions to our 401K, save it in a low-interest “rainy day” fund, or invest it in the stock market.

But, unless your returns from these endeavors match or beat the embedded interest rate within your debt … then, financially, you’re worse off.

Let me explain using an example.

Note that we have a combined debt total of $86,200 and $1,457 in debt payments each month. Do you know how much of that $1,457 payment goes to just paying off interest?

$490 (33.65%)!!

That figure is what’s known as your embedded interest rate. It’s the sum total of interest you pay on your combined debt. Want to see the math? Divide your monthly interest paid $490 by your monthly payment $1,457.

Now, here’s my question to you…

How would you like a 34% raise? Meaning more money in YOUR pocket — because you’ll never again be subject to the relentless compounding and ridiculously high interest rates being charged by the financial institutions.

Here’s the secret: Stop giving away your Lifestyle Money to the banks and lending institutions.

Take out a $20 bill from your wallet and rip off a third or more — that’s about how much of your after-tax income could be going to interest every year!

How would you like a 34% raise? Meaning more money in YOUR pocket — because you’ll never again be subject to the relentless compounding and ridiculously high interest rates being charged by the financial institutions.