When we talked about the power of compounding, we usually talked about how your returns compound. The other side of the coin, which is  seldom talked about, is that cost compounds as well. There is a distinct difference between returns and cost in your different wealth building method: Costs are definitely incurred but how much you earned in Returns vary.

Different kind of Costs

For various kind of wealth building methods they will have their own costs. If we were to generalize they are either management fees, sales transaction fees and administrative fees. These fees are definitely incurred. Whether you make money or lose money, the financial institutions and financial representatives already pockets these costs.

Savings Accounts & Fixed Deposits

Generally fixed deposits are low risk and currently very low return savings that enable you to earn a higher interests for your opportunity cost over the time you choose to commit the ......