The 8th Wonder Of The World
Albert Einstein, a not unintelligent chap, was once asked what he thought was the greatest of mankind's discoveries. His answer was "compound interest". He even went so far as to call it the Eighth Wonder of the World.
Now whilst you might argue there have been greater discoveries, compound interest surely warrants an investigation to see why Einstein was so impressed.
Lets look at an example, albeit an extreme one!
Let's say Christopher Columbus made an investment in the new world's future in 1492. If he had placed a single penny in a 6% interest-bearing account and instructed someone to remove the interest every year, the value of the interest earned to date (2008) would be just over 31p. Not too impressive, is it.
But if he LEFT the earned interest to compound over the 516 years guess what the account would be worth now? How about £114,242,178,628.50 That's £114 BILLION!
Maybe you can now see why Einstein was so excited. Compounding is VERY powerful.
Although I can hear you saying "but I haven't got 513 years to make compound interest work for me", you can benefit from the principal nonetheless.
1. Get rid of debt as fast as possible. With debt you have compound interest working against you!
2. Have a disciplined regular savings strategy.
Now there is some good advice!
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