The Power of Compound Interest

By MoneyBlueBook

The mightiest monetary force in all of the investment world is not the Federal Reserve. It is the power of the compound interest. If I could offer only a single piece of financial advice to anyone, I would encourage the individual to understand how compound interest works and why its effects are so dramatic over time. Even ole Albert Einstein supposedly called it the "greatest mathematical discovery of all time", and deservedly so.

Very few people become rich or financially secure through wages alone due to the realities of the trading hours for dollars concept, but by taking advantage of the miracle of compound interest, you can have a much better shot at achieving your financial goals.

The way compound interest works is quite straight forward. When you invest money, you earn a certain percentage as interest for the first year. In the second year you earn interest on the original principle and the interest accumulated during the first year. In the third year you will earn interest on the original principle as well as interest on all the previously accumulated interest. The more time that passes the greater the interest that accumulates.

The best time to invest was yesterday, but the second best time is now. Don't delay! The sooner in time you start investing the greater the benefit you'll reap through compounded interest.

Hypothetical Example To Demonstrate the Power of Compound Interest

To illustrate, let's compare two people - Bill and Hillary. Bill invests $2000 for 6 years straight in a savings account earning a fixed

By MoneyBlueBook

I enjoy using coupons. I don't spend a whole lot of time clipping coupons from the Sunday paper however. In fact, I don't even order or buy the Sunday newspaper and its collection of coupons. I prefer to do it the easy way - by emailing companies directly and requesting coupons and discount promotion vouchers.

Believe it or not, companies love to hear from their customers and appreciate your comments and suggestions. You don't even need to beat around the bush by sugar coating your emails and gushing about how much you love their products. I prefer to get straight to the point and simply ask them if they can send me coupons.

Here Are the Steps to Take.

That's it! See how easy it is? I've been receiving lots of coupons from every conceivable brand in the last few days after requesting them through their websites. Some brands like Kashi are super generous and will send

By MoneyBlueBook

This is for those of you who missed out on the real estate boom of the last few years. I think you'll know where I'm coming from.

Back in 2004 I was feeling downtrodden. I was only very recently a year out of graduate school and already my friends were snapping up properties left and right. I know it's not good to be envious of others, but I felt like I was missing out on the greatest boom of the decade.

A few of my friends and acquaintances at the time were making lucrative incomes by flipping houses, and perfecting the art of buying distressed properties, fixing them up, and selling them for quick profits. Some were even working on the side and making good money as house appraisers. I even knew a few people who took trips to Miami and Las Vegas to take advantage of the red hot housing markets there. Many were putting money down for pre-construction condominium projects that gained in market value even before the contract ink was dry. During the boom, it seemed like everyone was making money off of paper gains due to rapid appreciation of housing prices.

Great Real Estate Investing Opportunities Opening Up

Now, everything has changed. The real estate market has cooled and completely caved inward. Housing values are depreciating and foreclosures are up.

In the midst of this doom and gloom, I can crack a smile. The opportunistic eager beaver in me knows that my time to shine will soon be near. Am I

By MoneyBlueBook

Okay, it's time I joined the personal finance blogging community. I've been writing and posting quietly to myself like a hermit in my cave and I think it's time I shared more about myself.

I've been tagged by Pinyo at Moolanomy to reveal 7 random things about myself. I'm not sure what people would want to know about me so I decided to include a wide assortment.

By MoneyBlueBook

I used to fly a lot and racked up a lot of frequent flyer miles over the years, but now I have to be extra careful. Airline travelers who don't use their frequent flyer miles...well, frequently, may soon discover that their miles have expired. It is a growing trend, but airlines have shortened the time period that an account can remain inactive before miles expire. In most cases that time period ranges between 1 to 2 years.

Here Are the Expiration Policies For Some of the Biggest Airlines:

• AirTran: Points in A+ Rewards expire after 12 months.
• American Airlines: AAdvantage miles expire after 36 months of inactivity.
• Delta Airlines: Delta SkyMiles expire after 2 years of inactivity.
• JetBlue: TrueBlue points expire one full year from the date that they are earned.
• Northwest Airlines: Northwest WorldPerks miles expire if none are earned for 3 calendar years.
• Southwest Airlines: Rapid Rewards points expire after 2 years.
• United Airlines: Mileage Plus miles expire after 36 months of inactivity. Starting December 31, 2007, miles will expire after 18 months of inactivity.
• U.S. Airways: Dividend Miles expire after 18 months of inactivity.

How You Can Easily Prevent Mileage Expiration

The way to prevent your miles from lapsing due to inactivity is to simply generate miles-earning activity for each airline that you have an account with. Other using than using a specialized miles-generating credit card rewards like

By MoneyBlueBook

I was a late comer to the cell phone scene, but once I got the cell phone I ditched the traditional land line. Today, I only use cell phones and my high speed internet service. Who wants to pay for an extra land line?

I have not owned a traditional land line phone since I started using a cell phone more than half a decade ago. Frankly I just don't see the need to have an extra line that can only be used at home. I know advocates of land line service point out that wireless phones can be unreliable and that for emergencies it is best to have a land line, but in my opinion, my most potentially critical emergencies aren't likely to occur at home. My crucial times of need will likely occur on the road or somewhere far away from traditional phone lines when I may need to summon help from afar. At that time, only my trusty cell phone will do the job and my clunky land line sitting at home won't do me any good.

I'm Not Alone And I'm Part of A Trend

Apparently, I am part of a growing movement towards cell phone only households. According to a recent study by Mediamark research, a firm that has been tracking such data since the mid 1980s, the firm found for the first time that cell-phone only households were starting to outnumber land line-only homes. More than a quarter of young adults have only cell phones, making them the leading