The Power of Compound Interest

Compound interest is an incredibly powerful tool that can help your child’s savings grow over time. Essentially, compound interest is interest that’s earned not only on the principal amount you save, but also on the interest that those savings earn. This can lead to exponential growth over time, especially when you start saving early.

For example, let’s say you invest $5,000 when your child is born and continue to add $2,000 to the account every year. Assuming an average return of 7%, after 18 years, the account would be worth over $62,000. That’s almost four times the amount you invested! And if you continued to add $2,000 per year until your child turned 25, the account would be worth over $103,000.

The key to maximizing the power of compound interest is to start saving as early as possible. Even if you can only afford to put a small amount of money into a savings account each month, the earlier you start, the more time your savings will have to grow.

Some tips for maximizing the power of compound interest include:

Starting to save as early as possible •

Investing in accounts that offer compound interest

• Regularly adding to your savings over time

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Avoiding dipping into your savings, if possible

Using Universal Life Insurance as an Investing Strategy

While life insurance is typically thought of as a way to protect your family financially in case of your untimely death, it can also be used as a powerful investment tool.

Universal life insurance policies allow you to invest your premium payments in a variety of investment options, such as seg funds, bonds, index funds etc. The investment growth within the policy is tax-free, and you can also withdraw from the policy tax-free.

One of the biggest benefits of using a universal life insurance policy as an investing strategy is the flexibility it offers. You can adjust your premium payments, investment options, and death benefit as your financial situation changes over time.

It’s important to note that while universal life insurance policies can be a powerful investment tool it is not for everyone. It’s important to carefully consider the investment options, and potential returns before investing in a policy. Working with a advisor can be helpful in determining whether a universal life insurance policy is the right choice for your family’s savings plan.