Summer Slay with Stocks Challenge: Day 4 – Earning Interest: Compounding

//Summer Slay with Stocks Challenge: Day 4 – Earning Interest: Compounding

Summer Slay with Stocks Challenge: Day 4 – Earning Interest: Compounding

Learn more about the challenge here.  Missed some of the challenge?  You can view them here.

Day 1: Why Invest?

Day 2: Anatomy of a Stock

Day 3: Watch What? Watch Lists

This training/challenge is for educational and informational purposes only.  These materials do not constitute a recommendation to engage in any particular securities transactions.

Investment products are: Not FDIC insured | Not guaranteed by the bank | May lose value

Week 1: Stock Basics

This week’s goal is to introduce you to stocks and help you build a foundation for investing in the stock market.  This is a great place to start if you are a beginning investor or would like a refresher if you have already started on your investing journey.

 

Compounding Interest

If you had a choice, would you choose to take $1 million, today or a penny that will double every day for the next 30 days?  Most would take the $1 million and run.  However, if you took the penny that doubled for 30 days, then you would walk away with a cool $5,368,709.12.  Unbelievable, right? Well, that’s the power of compounding.  The chart below, shows how that penny goes to work with compound interest.

Compound Interest is interest that is calculated on your initial investment AND any interest you have earned in previous periods. Compounding will make your money grow at a faster rate than if it was earning simple interest (interest that is only calculated on your initial investment). Simply put, it is interest on interest or as I like to say, “money on top of money”. With stocks, your funds are able to work for you while you are asleep or busy with life using this nearly magical concept known as compound interest.  The more money you have compounding, the more magic gets applied, and the faster your money grows.

Day 4 – Earning Interest: Compounding

Did you know that 59 percent of women guess how much they will need and don’t even consider the interest rate needed to reach a financial goal, such as retirement?  Looking at the amount we need to save per month, pay period, or every year helps you to begin to put a plan in place.  Your goal should be to find the highest possible interest rate, while minimizing risk, to help you reach your goals.  What better way than to do that by investing in a company that has been around for a long time with a stock that has a proven track record?  With an investor’s mindset, you need to find investments that will help you meet your financial goals.

With stocks, you can take advantage of rates of return that may allow you to reduce the amount you need to save per month and/or reduce the amount of time it takes to reach your goal.  Doesn’t that sound great!  This allows you to take the pressure off of only focusing on working for the money, but to shift your thinking (and actions) to finding stocks that will provide you with the rate of return you need for your money to work for you.

Today’s Investing Activity:  Select a goal and a stock from your watch list to determine how much you need to save per month.  Select another goal and do the same thing, except determine the amount of time it will take to reach your goal.

Use my worksheet ==> Compound Interest-Wksht to help you with today’s activity. Feel free to take a screen shot of your worksheet and share with the group or leave a comment with your results.

STEP 1 – Locate Prior Year’s Stock Performance

Select one of your stocks from your watch list to use for prior year’s performance.  If you are using the Yahoo! Finance app, then follow these steps:

  1. Enter the ticker symbol
  2. Under the chart, select “1Y”
  3. Turn your phone sideways to “Landscape” view
  4. In the lower right-hand corner select the percentage symbol
  5. Roll your finger across the blue line until it reads “Dec 30 2016”
  6. Write the percentage down on your worksheet

  

 

 

 

 

 

STEP 2 – Select a goal and determine the savings rate or time to goal

Select one of your goals and write the information on the worksheet or on paper.  Use the calculators at MSN Money (Click Here ==> MSN Money ) to help you determine the monthly SAVINGS GOAL or TIME TO REACH GOAL.

 

 

 

 

 

 

 

That’s it!

  • Select a stock from your watch list and find out the interest it earned last year
  • Select one of your goals and use the MSN Money calculators to determine your monthly savings rate
  • Repeat for another goal to determine the amount of time to reach your goal
  • Share a screenshot of your worksheet in The Stocks & Stilettos Society or let us know in the comments below

Today’s activity focuses on understanding how much you need to save and the power of stocks to help your money grow using compound interest. This helps you to identify stocks that may carry a little more risk than you may be accustomed to, but that allows your money to do the heavy lifting to meet your financial objectives. Although past performance is not an indication of how a stock will perform in the future, using past performance gives us a little insight into how well (or bad) a stock price has grown (or not grown). At the end of the day, it’s all about telling your money what to do and how hard to go to work for you using the power of compound interest.

Tomorrow: Day 5 – Account Elevation: Dividends

Follow me here:

Instagram: @StocksandStilettos

Facebook: @StocksandStilettos

Twitter: @StocknStiletto

Group: bit.ly/stocksandstilettos

Happy Investing!

 

 

Cassandra

By | 2017-06-15T05:39:05+00:00 January 12th, 2017|Categories: Uncategorized|30 Comments

30 Comments

  1. carmen e carroll January 12, 2017 at 2:31 pm

    I’ve downloaded the MSN Money app, but I didn’t get a Savings Calculator. It has a wealth calculator, which is slightly different from what you show on this page. Can you assist, please?

    • Cassandra January 12, 2017 at 2:32 pm

      Carmen, click on the words “MSN Money” in today’s activity and it should take you straight the site.

  2. Victoria January 12, 2017 at 3:09 pm

    My apologies just seeing the comment box. I’m really enjoying this challenge . I wanted to start my new year off fresh, right with a renew mindset.
    My goals
    1.) Freedom
    2.) Debt free
    3.) Being able to provide for my children, children children,
    4.) Able to retire in 3 years or less

    • Cassandra January 13, 2017 at 9:20 am

      Victoria, these look good! You’re children will be very lucky someday!

  3. Shannon January 12, 2017 at 5:05 pm

    To achieve your goal of saving $75,000 (pay off student loan debt in 5 years) at an annual interest of 9.61%, each month you need to invest

    $1,010 per month.

    • Cassandra January 13, 2017 at 9:19 am

      Hey Shannon, is the $75,000 your goal? If so, it is definitely achievable.

  4. Krista January 12, 2017 at 7:23 pm

    bbbayyybbbaaaeee bayyybaaaee…I just want to tell you how much FUN Im having…..Cassandra youre the best

  5. Martrica January 12, 2017 at 7:48 pm

    I am not sure if i did this correctly. My selected company is Groupon. I am on my computer and selected the graph. However, I am not locating the percentage. I have 3.32.

    • LaMeka January 17, 2017 at 1:38 am

      I don’t have a percentage option on my screen either

      • Cassandra January 17, 2017 at 5:43 am

        Did you look in the lower right-hand corner?

  6. Vickie Woodward January 13, 2017 at 3:03 pm

    Help

  7. Fey January 13, 2017 at 7:34 pm

    Is this the amount I have to invest monthly?

    • Cassandra January 13, 2017 at 8:43 pm

      I’m not able to see it here. Are you able to post in the group?

  8. SeanPre January 14, 2017 at 3:38 am

    Ticker: AMZN 31.57%

    to save $1,000,000 in 15 years w/ an annual compounding interest rate of 31.57% I would need to make a monthly contribution of $428.

  9. Tonia January 16, 2017 at 3:21 pm

    I was doing the compound interest exercise from my laptop and it does not provide the % symbol. Any advice as to how I can get the percentage from my laptop?

  10. Arlette January 16, 2017 at 3:59 pm

    ammmaaaaaazzzzziiinnnnggg

  11. Josette Fleury January 16, 2017 at 5:24 pm

    I am soooooooo excited!!! I haven’t had a chance to post but I am playing catch up on week #1 and I will start week #2, day 1 soon as well. This is what I have so far.

    Day 1: my goals
    1. Debt free (pay off student loans and mortgage)
    2. Retirement in 10 years and investment returns of 1,000,000
    3. Buy 2nd home
    4. Buy vacation home
    5. Leave some money or property for my three daughters

    Day 2: Ticker Symbol & stock price
    DNKN 51.84
    NKE 52.92
    GOOG 807.88

    Day 3: Watch List
    DNKN 51.84
    NKE 52.92
    GOOG 807.88
    AMZN 817.14

    Day 4: Savings Goal
    Savings goal: 1,000,000
    Current savings: 500
    Interest: 38.51
    Compounding: monthly
    Number of years: 10
    Monthly investment: $725

    Day 5: DNKN
    Forward annual dividend rate: 1.20
    Divided by 4: = .30
    Forward annual dividend yield: 2.33

    • Cassandra January 17, 2017 at 5:46 am

      Yay! I’m excited for you! I’m so glad you were able to catch up. It look like you got it!

  12. JOSette Fleury January 16, 2017 at 6:43 pm

    Hi, I tried posting earlier but looks like it didn’t post on here! Please advise.

    • Cassandra January 17, 2017 at 5:46 am

      All comments have to be approve prior to posting to avoid spam on the site. No worries, I see them. 🙂

  13. Yvette January 18, 2017 at 8:15 pm

    Hi Cassandra,

    I’m playing catch up. the % sign does not show up on any of my picks. It ends with the max

  14. Stantafferta Sparrow January 20, 2017 at 9:50 pm

    I am playing catch up..my life right now wont let me be great and on task but I am determined to see this through..I am not getting a percentage sign….need assistance

  15. Best January 21, 2017 at 3:21 am

    Goal

    1. Debt free by end of 2017

    2. Retire in 2018

    3. Relocate to a warmer climate

    4. Build Home

    5. Enjoy my grandchildren and children

    6. Travel with oversea missionary group

    Need save $1500 per month

  16. Summer January 22, 2017 at 3:08 am

    1. Retire with $10M by 2047 Used TSLA (20.82% annual interest rate) stock with $25K currently saved. It says I need to save $163 per month.

  17. Simone January 24, 2017 at 3:50 am

    I really appreciated this exercise. The one major take away is that I am kind of kicking myself for not having bought some of these stocks before!!

  18. Monique January 25, 2017 at 10:36 pm

    My goal is to be able to pay off my student loans, buy a house, and pay for my kids college education, etc..

    My ticker symbol MSFT and the interest rate was 22.18% for Dec. 30,2016

    To achieve your goal of saving $500,000 in 4 years at an annual interest of 22.18%, each month you need to invest

    $7,490

  19. Ursula January 28, 2017 at 5:21 pm

    To get the annual rate %, I cannot locate the % symbol using my laptop or the Yahoo Finance app on my phone. Help!

    • Cassandra January 29, 2017 at 2:13 pm

      Hi Ursula, we have videos in the group. Join us at bit.ly/stocksandstilettos

  20. Sharon February 1, 2017 at 2:18 pm

    I can’t find the video to show how to get the annual % rate and the % sign is not at the bottom of my screen. Please help.

    • Cassandra February 2, 2017 at 1:12 pm

      The video is posted in the group. Search for alerts and it will be there.

Comments are closed.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.

This Is A Custom Widget

This Sliding Bar can be switched on or off in theme options, and can take any widget you throw at it or even fill it with your custom HTML Code. Its perfect for grabbing the attention of your viewers. Choose between 1, 2, 3 or 4 columns, set the background color, widget divider color, activate transparency, a top border or fully disable it on desktop and mobile.