The RICH Formula

Ever thought that life would be so easy if only there was some sort formula that you can follow to become incredibly rich. You just follow the formula and “pOOf!”, you instantly become unbelievably wealthy. Yes life would be great, but would you believe me if I said that something so absurd actually exists and has been used by the wealthiest people in the world to help create their wealth. Think life can’t be that easy. Think again.

I’m here to introduce to you a formula, so simple, that can make you become amazingly rich. And guess what I’m going to tell you all for FREE.

The formula of riches is called…

Compound Interest

You might of heard about it before, but this mathematically equation can really help everyone become rich.

Here it is:

FV = PV(1 + i/n) ^t*n

What do those letters stand for,

FV = Future Value
PV = Present Value
i = interest rate
t = time
n = how many times the interest is calculated within a certain time (t)

Here’s an example,

You have $10,000 in the bank and earn 5% in interest for the year.
How much interest do you earn for the year,

5% of $10,000 is $500
($10,000 * 0.05 = $500)

So at the end of the year your new balance will equal your initial deposit plus your interest earned, which becomes $10,500.

Then what happens next year when interest is calculated again, you still earn 5% in interest, but how much interest will you earn?

Well, 5% of 10,500 is $525.

In the second year interest earned is $525, but in year one you only earned $500. The reason for the difference, is proof of the work of compound interest. As you see you are actually earning interest on the interest earned from the previous year.

Your new balance will then becomes $11,025.

The great thing about this formula is that you don’t need that much money to get started, the most important part in this formula is TIME.

Do you see were “t” is placed in this formula? It’s an exponent. And if you understand how exponents work you will know that the bigger that number is the bigger the final value will become. You are trying to create the largest final value for yourself, so having a larger “t” value will greatly help increase your final value.

If you’re young, you probably don’t have that much extra money to save, but you definitely have what is most important, TIME.

Becoming a millionaire by the time you retire is really simple, all you need is very little money to start and a lot of TIME.

Here's two different scenarios,
1. 18 year old saves only $100/month until they retire
2. 30 year old saves $200/month until they retire.

If they both earn the same annual interest rate of 10%, by the time they retire at 65, who has more money?

After doing the calculations, the 18 year old will have Over 1 million dollars, $1,103,048 to be exact.

How much would the 30 year old have? Well $685,691.

The 30 year old will not become a millionaire, even though he saved twice as much money every month.

Time Really is Money, so don’t waste it and get started as soon as possible.

Be financially HiP now, so you won’t be financially crippled later.

Read my Magic of Compound Interest post to see the formula in action.