I didn’t learn anything completely new in this book, however, I was reminded of what matters when it comes to building wealth and a good credit record. It’s the sort of stuff I talk about in Black Girl Getting to Wealthy: Build Super Savings (available on amazon.com, on amazon.co.uk and other local amazon sites).
The biggest take away: automate your financial life! Your savings, your mortgage payments and your bill payments should all be automated so that you don’t forget to save.
I do this. What helps is holding different bank account for different things. So in our household we have a joint bank account from which all bills are paid and each month a given, fixed amount goes in there.
We have a savings account to which our savings are automatically placed.
And now, because our property portfolio is growing ever larger we have designated an account that I wasn’t using for all rents from property investments to be received, mortgage payments to be made and property related expenses to be made.
In addition, the moment our son got a birth certificate back when he was a month old we opened a bank account for him and each month we place £250 into that junior ISA (£125 from mama, £125 from papa). The money goes there automatically so does his child benefit of £20/week from the Government.
How much will he have on his 18th birthday if we just let things be and the money continues flowing into his account and assuming he gets a rate of at least 3% per annum compounded annually? Fyi, he’s been getting 4% in interest since we opened the account so this is not a foolish assumption.
£97,432 – that could fund a deposit on a property, pay for university plus leave plenty of change for a round the world trip.
If we stopped saving on his fifth birthday he would still have £35,450 in his account on his 18th birthday if the saved money continued to earn at least 3%.
If he continues to enjoy the 4% he’s getting at the moment that will be a whooping £107,752 on his 18th birthday if we save until then.
The power of compound interest.
A sensible book that I recommend; get it on amazon.com or amazon.co.uk.
Time allowing, I love to read. If I read anything interesting, I will blog about it here.