There is a lot written about how to actually get financially independent in your life. You should want to know more about how finances work. Typically you can see how people who should be rich aren't... take Mike Tyson... he was undisputed world champion. He was getting paid millions of dollars per fight ($35 in one against Evander Holyfield). He had an estimated net worth of $300,000,000 US dollars (about $400 million in NZ). How ever he lost his fortune.
This post is not about boxing, it is not about careers with big incomes (although that helps). This post is about 'Interest' - the money that is paid for borrowing money. It is something that very very few people can avoid.
Interest is charged as a % of the amount borrowed (called the principle). The calculation of the percentage is shown for a full year (p.a. is latin for per year).
But it's never a simple thing. The banks/lenders will want to recalculate interest and add that onto the amount you borrowed. This is called compounding...
The trick to getting rich is to be able to save an amount of your pay and invest it to gain compound interest. Equally it is important to avoid getting charged compound interest (pay off your loans quicker).
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