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b'Today I\\u2019d like to talk about a different topic that I\\u2019ve actually never heard before. Everybody has heard, of course, about compound interest. You know how you put aside so much money at a certain age, say 25, $100 a month, and you\\u2019d have 1.5 to 2 million dollars by the time you\\u2019re older. I want to talk about compound interest in reverse.\\n\\nThink, instead, of the bank. When you have debt, the bank has loaned you money or put it into an account to gain interest, just like you\\u2019re supposed to put money into an account to gain interest for your retirement. You\\u2019re really an agent of their expansion, at extremely high rates. They\\u2019re going to get rates that are maybe 20\\u2026 Actually, I heard from an executive in basically the largest credit card company, that people on average, between the interest, fines, and late payments, pay just over 31% on average. You would only get about 12% maybe if you invested your money. You can see what this means: You are really funding the bank\\u2019s retirement, instead of your own.\\n\\nNow, let\\u2019s see what this means. The issue is you\\u2019ve got to find a way to put money aside and see how you can build up your own savings. What I wanted to talk a little bit here about is debt and what happens. I\\u2019ll tell you a little bit about my Mother\\u2019s story. My Mother, when I went back from the military into college, I started one of my first courses, which was an accounting course. I knew my parents were not really good at maintaining. They were great at taking care of us, but they weren\\u2019t great financially, as far as financial astuteness. I talked my Mother and Father into: \\u201cLet me use the house account to practice keeping accounting books.\\u201d It\\u2019s kind of silly it\\u2019s only a house, but the major part of it was really to help them out and help them manage their money.\\n\\nShortly after that, about a year after that, my Mother went into the hospital and she was there for quite a while. While she was there, I took a look at things, did it, and all of a sudden there was some money that came in and it was substantial enough to literally pay off their debt. They owed a lot. They had a lot on credit cards, car loan, etc. All of a sudden, when they came back and started doing things, I was able to start putting aside into a savings account, substantial sums of money. They, all of a sudden, had much more money than they had ever realized before.\\n\\nOf course, what I did for a long time because my Father in particular would always say: \\u201cOh, I want to get such and such!\\u201d I would say: \\u201cOh, gee, the car insurance is just coming in. The car insurance is coming in.\\u201d Then some other month: \\u201cOh\\u2026\\u201d and there would be some other expense. I would never lie, but I would emphasize\\u2026 I wouldn\\u2019t say: \\u201cOh, we have plenty extra besides that,\\u201d I would just do that.\\n\\nHow did this happen? How did they have so much? They key was while they were in debt, they were paying off large interest. You\\u2019ve heard people caution about it, but let me draw a better picture for you. You\\u2019ve heard how you can put aside $100 a month from the time you\\u2019re 24-25, and you\\u2019ll have 1.5 million to 2 million dollars at 65. That\\u2019s because of compound interest. That interest is usually relatively small by comparison. Dave Ramsey puts it at 12% for the long-term growth in the stock market.\\n\\nIf you\\u2019re charging things, I happen to have a friend who is high up in a credit card company in the treasury department, and told us that actually the interest, when you include all of the late payments and fees that go along will be, on average, over 31%. Even if it\\u2019s 20%, think of what that compounding interest does for the bank. You\\u2019re paying it. They\\u2019re accumulating that money instead of you, at a much higher rate than at 12%. In a sense, you\\u2019ve got compound debt that you\\u2019re accumulating. What you\\u2019re doing is you\\u2019re paying it, so it seems like just a little bit at a time, but you\\u2019re compounding the debt that they have.\\n\\nLet me get back to what this really did for my parents.'