FYI – Robbins’ exact line was “Compound interest is such a powerful tool that Albert Einstein once called it the most important invention in all of human history.” Over the years, I’ve read Einstein quoted as saying that ‘compound interest was one of man’s greatest inventions’, or other variations on this theme. In Tony Robbins recent tome (600 pages to write what would fit in a short magazine article) he offered this Einstein line.
Compound Interest Is Man’s Greatest Invention
- Fans of gurus will continue to stand up for their heroes despite displays of lack of character and lack of sense.
- (It is one of those attributed quotes, but it’s better coming from Einstein than anyone else, I suppose).
- QI has found no substantive evidence that Albert Einstein, Baron Rothschild, or John D. Rockefeller employed the saying.
- One question I was asked at practically every stop was, “What’s the greatest invention of all time?
- “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.
Compounding works even for relatively low annual returns. To benefit from it you have to start as early as you possibly can, re-invest everything you make and, ideally, keep adding. payroll for accountants intuit But it enables you to turn small sums into large ones. A penny that doubles every day would be worth over five million on day thirty.
Did Albert Einstein declare compound interest to be ‘the most powerful force in the universe’?
There is a really cool tool here at Monevator, which allows you to see the effects. An initial deposit of £5,000, with £2,000 added every year and a 7% rate of return becomes half a million in forty years and a million in 50. This table shows the effects of compounding at different rates of return, but it assumes you don’t add to the initial pot. Before we get started today, if you haven’t already seen it, check out my interview with Alex Langer of Sierra Madre. There could be quite an opportunity setting up with this silver mining company. In personal finance articles I frequently find quotes injected to attribute some further relevance to one’s position.
I’d like to know if it was made up or if Einstein ever said anything close to this. how to double your money In conclusion, this article presents a snapshot of current research. 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.
The underlying wisdom of the adage derives from the power of compounding, what Albert Einstein called the eighth wonder of the world. (It is one of those attributed quotes, but it’s better coming from Einstein than anyone else, I suppose). This economic philosophy doesn’t have a direct relationship with money management, but I thought it was interesting to note. Because of individual freedom, cherished by Einstein, we are able to build wealth for ourselves.
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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. Being thankful for these opportunities is certainly one reason not to throw it away by making bad decisions with money. It may be difficult, but financial independence is within reach for anyone who wants it although there can be unavoidable external situations making it more difficult or impossible for some. But for at least those reading Consumerism Commentary, there should be enough opportunity to move towards financial independence.
He cited a good college education with providing the type of cognitive skills that allows people to think for themselves and imagine possibilities that have never been imagined. “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. A. Michael Lipper, president of Lipper Analytical Securities Corp., quotes Albert Einstein’s remark that “The eighth wonder of the world is compound interest.” If you can invest at a sure 7 percent return, your money will double in 10 years. If you are patient, and stick with your investments over time, you will almost always come out ahead.
At the suppressed interest rates of the 2008 to 2021 period, it’s a very different story. Savings left in cash at 0.1% would take 720 years to double. There is also a useful predictive tool which can tell you how long it will take for your money to double, assuming you compound at a certain rate. Invest just £2,150 every year at 7% and in fifty years you will have a what is public accounting million quid. But at the same rate over a fifteen year period to get to a million you would have to invest £33,800 – fifteen times as much.
Simple and compound both have advantages and disadvantages. However, Albert Einstein certainly had an opinion on the matter. Of course, if you lose money, in a given year, it’s a very different story. Compound purists avoid losses like the plague, as we all should, and, most of the time, steer clear of cyclical sectors that can be prone to prolonged bear markets – unless they feel they can time them. That’s why compounding works well in conjunction with a diversified portfolio.
