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GetThis: The Power Of Compound Earnings
By Carl Surran
Fall 2004
Let the power of compound earnings work for you!
The phrase "compound earnings" describes the interest earned on the principal of an investment plus the interest that was earned earlier. If a $1,000 investment earns an average of 10 percent per year, the investor had accumulated $1,100 - the original $1,000 plus $100 interest - at the end of the first year and $1,210 - the $1,100 from the first year plus another $110 in interest - at the end of the second year. It's a phenomenal way to increase personal wealth.
Servicemembers can apply this strategy through the Thrift Savings Plan, which maintains retirement savings accounts for more than three million participants in all branches of the federal government - including all branches of the uniformed services.
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Carl Surran is managing editor of Military Money.
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