Compound Interest Can Be Your Best Friend

Here are a few quick lessons with enormous impact that we can learn from “Bobby Bonilla Day”. For those unfamiliar with Bobby Bonilla Day, click here.

• The Power of Association, both good and bad: Bobby’s agent was an insurance agent before becoming a sports agent, so he had experience dealing with large annuities (which is basically what Bonilla’s deferred payment turned into). The Mets ownership was connected with Bernie Madoff and had large amounts of money invested with him. The reason it made sense to them to pay Bonilla 8% interest is that they believed they’d be earning 10-15% through their Madoff investments. Turned out well for Bobby Bo, not so much for the Mets & Madoff.
  
• Dangers of Using Debt to Make Speculative Investing: if you have to go into debt to invest, it’s probably the wrong time to invest. If you want to speculate, speculate with cash. If you make a bad investing decision using cash, you lose your cash. If you make the same bad decision using debt money, your loss is magnified and you fall on the wrong side of compound interest (the side where you get pounded by it!)
  
• Compound Interest Can Be Your Best Friend, or Your Worst Enemy: Bobby Bo & his agent turned $5.9 million into $29.8 million. The Mets turned $29.8 million into $5.9 million. The only friend closer to Bobby Bo is probably his agent, especially on July 1st!
  
• Bobby utilized Kiyosaki’s three keys to wealth: Long Term Vision, Delayed Gratification, and the Power of Compounding

When you look back at your recent financial history, who do you identify with more: Bobby Bo or the Mets?

If it’s Bobby, congrats, you have a great financial future ahead of you!

If it’s the Mets, don’t beat yourself up. Pick yourself up instead. Most of us have been there too, and with the help of better information and the hunger to apply it to our lives on a daily basis, we can get on the Bobby Bo path as well.

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