For some people, the phrase 'compound interest' conjures up dim memories of a high school teacher droning on in a quiet afternoon class.
But according to Business Insider contributor Jen Glantz, being unaware of the magical leverage of compound interest cost her plenty.
That is, until she discovered that compound interest is basically interest on your interest. She immediately changed up her savings strategy.
First, she moved her money out of her bank's pitifully low-yield savings account into an online high-interest account.
Second, she put a chunk of cash she wouldn't need for awile into a CD that compounded daily.
Finally, Glantz began contributing to her IRA monthly, instead of at the end of the year. That allowed her portfolio to earn even more through compound interest.
But according to Business Insider contributor Jen Glantz, being unaware of the magical leverage of compound interest cost her plenty.
That is, until she discovered that compound interest is basically interest on your interest. She immediately changed up her savings strategy.
First, she moved her money out of her bank's pitifully low-yield savings account into an online high-interest account.
Second, she put a chunk of cash she wouldn't need for awile into a CD that compounded daily.
Finally, Glantz began contributing to her IRA monthly, instead of at the end of the year. That allowed her portfolio to earn even more through compound interest.
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