Overview

Invest just 10% of your income. Spend $1,000,000 with no income tax. Use low-cost mutual funds earning 10-12%. The average income tax refund is about $3,000-10% of wages of $30,000. We can accumulate $1,000,000 from $3,000 a year because of compounding. Compounding is money earning money on its earnings when it is reinvested. KahnAcademy.org Invest your money in businesses sharing profits with you and over time you can reach $1,000,000. A special IRS-approved account makes our $1 million tax-FREE. Tax-FREE is like an extra $300,000 from Uncle Sam. Compounding is how the best investor of our age makes money. Warren Buffett started with $6,000 saved from his paper routes and in 60 years, accumulated $60 billions. "My wealth has come from a combination of living in America, some lucky genes, and compound interest." Compounding high earnings over time is the lesson we should have learned in grade school. Mr Buffett did not say wealth is about picking the next Apple stock or 'leveraging derivatives'. In fact, he lives in Omaha not Wall Street. We can use compounding too.