Hello everyone. This is my first post on here. This has to be a stupid question because it seems way too easy to get rich but...
When a monthly CD has a yield of 1.3%, what's preventing me from investing $5000, getting a return of $65, investing that $5065 next month at a similar rate, and just keep doing that every month? When you get 1.3% return every month, and keep re-investing it with the interest, $5000 turns into almost $400,000 in 20 years. I know that's slow going but obviously it snowballs after a length of time. CD's are also FDIC insured I believe, so it's impossible to lose money.
So...my question: What am I missing? Is the 1.3% yield not really a 1.3% return on my investment in 1 month's time? Should I be dividing it by something? Why wouldn't this compound interest plan work like I'm thinking?
Submitted January 05, 2018 at 12:12PM by Rilesx3 http://ift.tt/2qqdA6e
