Self-made millionaire Ramit Sethi discovered that a couple earning six figures is making a "catastrophic" money mistake.
Based on a quick overview of the couple's finances, Sethi found that the couple has zero savings and investments.
With this, your initial investment grows exponentially by earning returns not only on the principal amount, but on the interest it accumulates as well.
Say your initial investment is $1,000 and you earn an annualized return of 10%, the average stock market return, according to NerdWallet.
That year, you'd earn 10% on your entire account total, not just your initial investment.
Persons:
Ramit Sethi, Sethi, Rich, Mark Hamrick, you'd
Organizations:
CNBC
Locations:
U.S