15/08/2025
Paying interest is like giving away your hard earned money. Earning interest is how your money starts working for you.
Let’s break it down:
If you take out a R200 000 car loan at 14.5% annual interest over 6 years, your monthly payment would be R4 175.88 . By the end of the loan, you’ll have paid a total of R300 663.36 , which means you are paying R100 663.36 in interest alone.
On the other hand, if you save R4 000 per month (roughly the same as your car loan repayment) for 6 years, earning 10% annual interest compounded monthly, your investment could grow to R391 460. That’s R100 960 earned in interest, simply by letting your money work for you!
Net Effect:
Paying interest: You’ll pay an extra R R100 663.36 in interest on top of the R200,000 car cost, for a total of R300 663.36
Earning interest: Your savings will grow by R100 960, bringing your total savings to R391 460.
That’s the difference between losing money and growing your wealth. The real choice is:
💸 Pay interest and lose money,
💰 Earn interest and see your wealth grow.
The net effect of earning interest: It’s like getting an extra 50.5% return on your money over 6 years. Meanwhile, paying off debt could cost you half of what you borrowed.
Schedule your financial consultation with me and let’s explore how I can add value to your financial journey: finance.stewardingwithliezel.co.za/book
