Compound Interest is The Eighth Wonder of The World

Compound Interest is The Eighth Wonder of The World

Compound Interest is The Eighth Wonder of The World is a quote attributed to Albert Einstein. He may, or may not, have said it but the extraordinary power of compound interest has been known for centuries.

You know what simple interest is, right? Putting $1,000 into a bank and getting a return of 4% interest per year.
At the end of the year, you'll have your original $1,000 plus $40 in simple interest. 

You may not be aware, or you may have forgotten, your high school math lessons about compound interest. In year two that $40 interest you earn in simple interest will earn interest.  Compound interest.  Compound interest is interest on your interest. During year two you will have $1040 earning interest.

Compound Interest is The Eighth Wonder of The World

This at first, may seem innocuous, even boring to you. BUT the magic of compound interest is the secret to getting rich...all be it slowly. Given time and dedication, mainly time, even modest returns can generate real wealth.

It important to start investing now. In the short-term, you can't see it making a huge difference. Don’t let that fool you. Short-term results are not as important as what will happen over the course of 20 or 30 years. Focus on your long-term goals. Be assured, saving plus compounding is your slow, sure path to wealth.

Start saving today, even if all you can save seems like such a small amount. It will ensure your future financial success. The amount of money you start with is not nearly as important as getting started early. Procrastination is the natural killer of opportunity. Every year you put off investing makes your ultimate retirement goals more difficult to achieve.

Compound Interest is The Eighth Wonder of The World

The only way to attain the wealth you desire is to spend less than you earn and to save the difference. The rich are not rich because they earn a lot of money; the rich are rich because they saved a lot of money.

Many books I have read on the subject of wealth-building have convinced me that people who become wealthy do so by spending less than they earn. There is no other source of saving, or of building wealth. It is not a high income that leads to wealth, although that doesn't hurt — but saving.

Slow and steady wins the race. Lots of average earners have gotten rich slowly. Be patient, be disciplined, even if you can only save a small amount you can begin creating a golden nest egg that will hatch later in life. Some think that a small amount of money saved can't possibily make a big difference but that is because they haven’t considered the extraordinary power of compound interest.

BONUS TIP. Check the description under this video for details about another passive form of income