Lesson 7: Compounding is incredibly powerful; start saving as early as possible.
If you start investing $1,000 a month at age 40 and earn 8% a year, you will have about $957,000 by age 65 (after investing $300,000 during that time). If you instead invest $272 a month starting at age 25 and earn that same 8%, you will have about $957,000 by age 65 (after investing $130,080 over that time).
Lesson 8: Pay off high-interest rate debt first.
If you have three loans, one at 6%, one at 9% and one at 15%, prioritize paying down the 15% loan.
Some financial experts recommend prioritizing the lowest balance loan first, regardless of its interest rate, because of the emotional benefit you get from checking that financial box.
However, the theme of these lessons is to separate emotions from money. Trust the simple math you learned in elementary school.
