I wrote “One Simple Rule for Building Wealth”, about using the “Rule of 72” as an estimation to
calculate doubling periods for our money based upon a hypothetical rate of return and time
frame. I encourage you to teach those you love about money and how the Rule of 72 can
motivate us to build wealth over the long-term. The key component is compounding: putting
money to work so that our original contribution earns a rate of return, increasing in size,
essentially continuing growth on the growth.

Did you ever stop to think about that concept in reverse? Spending money you don’t have,
charging your purchases to credit cards and not paying off the full balance immediately the next
month can be an example compounding in reverse, and you’re now dealing with the debt devil.
Your reverse “contribution” is the charge onto the credit card. If you are charged interest on your
balance and you do not pay off the full amount, the interest may accrue adding onto the debt you
owe. If you are again charged interest on the new balance, which includes your original
purchase plus interest on interest, you are compounding your debt. Even worse are examples of
when this debt was used for purchases that do not appreciate in value, which is the vast majority
of credit card spending.

Simple good decisions can compound. Simple bad habits can also compound. Which do you
choose? Compounding to work for you, or against you?

LouAnn Schulfer of Schulfer & Associates, LLC Wealth Management can be reached at (715)
343-9600 or louann.schulfer@lpl.com TheWealthInformationLady.com 
SchulferAndAssociates.com , or louann.biz

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC.