The Truth About Money: How It Grows, How It's Taxed, and Why It Matters More Than Ever
- Nathan U Wheeler
- Oct 10
- 7 min read
America is at a financial crossroads.
Our national debt has soared past $36 trillion, and the total debt-to-GDP ratio now exceeds 133% [1]. That means we owe more than our nation produces in a full year. It's not just a policy problem, it's a taxpayer reality. The likelihood of future tax hikes is no longer a question of if, but when. The ripple effect? If you're not intentional about how your money grows and how it’s taxed, you could lose a significant portion of your hard-earned wealth.
That’s why financial literacy isn’t just helpful, it’s non-negotiable. The good news? Once you understand the rules of the financial game, you can create a customized strategy that works in your favor. This article is your first step in doing just that.
In this debut piece, we’ll cover:
● The power of compound interest and the Rule of 72
● The three ways money grows: fixed, variable, and indexed
● The three ways money is taxed: tax now, tax later, tax-advantaged
● How to mix and match for optimal results
● And why this knowledge is more urgent than ever in today’s economic climate
Let’s dive in.
Compound Interest: The Eighth Wonder of the World
Albert Einstein reportedly called compound interest the eighth wonder of the world. Whether he said it or not, the concept deserves that level of reverence. Compound interest is what happens when the money you save earns interest, and then that interest earns interest, again and again over time. It’s a snowball that grows bigger the longer it rolls, and the earlier you start, the more momentum you build.
To understand it practically, we use the Rule of 72 [2]: simply divide 72 by your rate of return to estimate how long it will take for your money to double. At a 1% return, it takes 72 years. At 6%, you cut that down to 12. At 12%, it doubles in just 6 years.
