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The most powerful force known to man!

When asked what was the most powerful thing he had ever witnessed, Albert Einstein responded simply, “compound interest.” Here are two scenarios which illustrate the hallmark of his genius.
  • A $2000 sofa financed at 19.8% interest with minimum monthly payments will take 31 years and 2 months to pay off and you will pay more than $10,000. The interest alone robs you of $8,202 that you sweat for decades to earn. In fact, you will have to earn about $12,000 gross to net $8202 for the interest just so you can have your $2000 sofa. What could possibly be worth paying 5 times its value?

    But it gets worse. If you were to put that same $8202 of monthly payments into just a 10% mutual fund over the same 31 years, it would yield $45,540 in personal wealth.

  • Look at a second example. Let's say you regularly buy a new car and pay $300 per month. If you do that for just 1/2 of your working life or twenty years, you will be giving up money which if invested at 10%, would build to $227,810.65. That amount would generate $1,936.39 per month for the rest of your life.

    Let's be very clear about this. You are giving up nearly $2000 a month income so that you can spend $300 per month on payments now! It just doesn't make any sense except to the finance company--- to them it makes terrific sense! Who do you suppose gets that lost income?

Interest is far more than the little bit your friendly creditor requests for the use of their money, as seen above. But we do it every day. And until we remove the siphon hoses that have been rammed down our throats, we will never produce any wealth for ourselves. We need to live by one rule. We need to memorize it, stamp it on our forehead, ingrain it into our every fiber. And the rule is this: If I can’t afford something in cash, I can’t afford it! If I can’t afford something in cash, I can’t afford it! If you say it to yourself over and over, day in and day out, eventually it will become a part of your life.

Is it necessary? I don’t know. How’s your financial future looking? Do you really appreciate paying 5-6 times the value of something? Is it really worth juggling the monthly payments, month after month, year after year? If it is, fine. Keep on keeping on.

But if you are tired of the scam, if you are tired of having your future wealth stolen from you, if you are tired of sweating your life away just to fatten the bottom line profit of the finance company, then repeat to yourself, [font color="#ff0066]If I can’t afford something in cash, I can’t afford it! Beat the monthly payment scam by getting out of debt and paying cash.

And if you think operating on cash is a pipe dream, check out some of the articles at this site especially. There (among other things) you'll find out how to eliminate all your debt including your mortgage in about 7 years with the money you already earn.

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