Albert Einstein’s Philosophies For Growing Wealth

compound interest albert einstein

QI hypothesizes that an anonymous advertising copywriter initiated the idea that compound interest was the world’s greatest invention or man’s greatest invention. However, 1916 is not necessarily the origin of this hyperbolic statement, and future researchers may locate earlier citations. QI was unable to find any support for the attachment to Einstein, and QI believes that it is very unlikely that Einstein made this remark. Nobody makes a real fortune overnight, and nobody goes broke in one night either. The exceptions to the rule regress back to where they should be over time. That’s why lottery winners oftentimes end up broke years later.

Albert Einstein’s Philosophies For Growing Wealth

Inflation occurs when the prices of goods and services increase over time. The Federal Reserve’s “dual mandate” includes keeping prices stable, and monetary policymakers have equated price stability with a low, measured inflation rate targeted state tax and expenditure limits at 2% over the longer run. For an example of compound interest, let’s assume an 8% interest rate with a retirement age of 65.

Have you ever wondered at what makes an avalanche so powerful? A force so massive actually starts from a very small place. Before an avalanche can smash trees and break legs, it needed to become a snowball first, and a piece of snow before that. This blog explains everyday economics and the Fed, while also spotlighting St. Louis Fed people and programs.

  1. There’s often a trend to follow the herd — to buy stocks when it seems like everyone is buying and to sell stocks when it seems like everyone else is selling.
  2. If Columbus had of placed one single dollar out at 6% interest compounded annually with instructions to pay the proceeds to you today, you would have over Ten Billion Dollars coming to you.
  3. I lived on a ranch in California, and I was hard put to find the ladder whereby to climb.
  4. America provided the opportunity for any individual to succeed.
  5. “The value of a college education is not the learning of many facts but the training of the mind to think,” Einstein was quoted in the New York Times in 1921.

In Tony Robbins recent tome (600 pages to write what would fit in a short magazine article) he offered this Einstein line. I’d like to know if it was made up or if Einstein ever said anything close to this.

Compounding interest is your friend if you are poor.

The label “eight wonder” was applied to compound interest in an advertisement for a bank in 1925. No attribution was provided, and anonymous advertising copy writers have applied the “eight wonder” label to a wide variety of objects and ideas for more than two hundred years. QI has found no substantive evidence that Albert Einstein, Baron Rothschild, or John D. Rockefeller employed the saying. There’s often a trend to follow the herd — to buy stocks when it seems like everyone is buying and to sell stocks when it seems like everyone else is selling. Being a non-conformist, investing against the grain, can help investors buy low and sell high. That’s the only way to be profitable in the stock market.

At a 2% interest rate, it would take 36 years to double your money. At a 12% interest rate, it would only take six years to double your money. For savers, it means earning interest on your original principal—plus on the interest your investment generates. Compound interest is sometimes described as “interest on interest” because earned interest essentially gets added to the principal over time.

One reply on “Compound Interest Is Man’s Greatest Invention”

Back to Albert EinsteinWith such potential for astronomical growth, it’s no wonder Albert Einstein called the power of compound interest the most powerful force in the universe. The problem though, is that there is substantial doubt he actually said that. If you are patient, and stick with your investments over time, you will almost always come out ahead. Authority figures, like professors who lecture without open discussion and politicians, don’t always deserve to be trusted. And from a consumer perspective, we have to resist the temptation to consider salespeople authority figures or experts.

compound interest albert einstein

Why can’t you take the 8th wonder of the world and do something great with it? If you want more wealth and abundance in this world, be the change. I believe in you, my fellow freedom fighter because I know you can make a difference.

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