Grow: This retired baseball player’s contract is the perfect example of the power of compounding

Most of us focus on celebrating America’s birthday in July. But former baseball player Bobby Bonilla has his own day to enjoy. July 1 marked his annual payday, when the New York Mets sent him a $1.19 million check as part of a deal set up 18 years ago.

How’s that work?

In 2000, the Mets cut the once-promising Bonilla from the team after years of disappointment. Terminating his contract early, the ball club owed him $5.9 million for that season, even though he didn’t play a game. Bonilla and his agent, Dennis Gilbert, opted to hold off on collecting at that time, instead agreeing to spread the payments out over 24 years, starting in 2011, with an 8% annual interest rate.

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