How to Earn 18% Interest: Early Payment Discounts
If a vendor offers you a discount for paying early, seriously consider doing so.
For example, you might be offered “1/10 Net 30” terms, which means you get a 1% discount if you pay within 10 days, and no discount if you pay within 30 days.
On a $10,000 vendor bill that’s $100, which is nice. But what’s better is that the math works out to a guaranteed 18% return on your money because you’re investing that $10,000 for only 20 days, not a whole year.
So before you lock up your company’s cash in an interest-bearing CD earning 5%, try to negotiate an early payment discount with your vendors. It makes your money work harder for you.
