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Einstein was convinced compound interest is a superpower..
Einstein called compound interest the world's "most powerful force." (Pic: unique mix by the author)
I. Example Beats Precept
Earlier while on FaceTime with my teenage cousin, he pointed into the screen.
"What does this quote mean?" he asked me, referring to the Einstein sticker covering my Mac's case.
I flashed a smile. "The quote means what it says, young fella... 'Compound interest is the most powerful force in the world.' ”
His blank expression suggested I needed to fill in the blank.
Because example beats precept, I had just the illustration in mind.
"Your favorite food is pizza, right?" I asked.
He nodded.
"Cool. Let's say you hopped on a plane and moved here with me in New York, where pizza is king, and for an entire year – each day you bought a $2 slice of pizza from Little Italy," I said. "By the year's end, you'll end up spending how much?
He held up a finger. Seconds after calculating on his phone, he blurted, "$730!"
"Technically it would be $732, given that it's Leap Year and all..." I joked. "Okay, let's say you decided to give up pizza altogether and saved that $730 instead."
He waved me on.
"If you invested your savings and earned just 5% interest, after five years... guess what?" After a pregnant pause, I continued. "You'll have earned $70 short of a grand. If you extended that to 30 years, your grand will have ballooned to over $3,1oo."
He finally had an aha! moment. "Ahh, so compound interest is almost like an invisible force?" he asked.
I winked. And then added, “Always remember: if you wish to get rich, immediately start viewing the word ‘saving’ as a nickname for earning.”
II. Gates' Law = the Law of Growth
Compound interest at work.
Because no idea is original, perhaps the "genius" simply removes the letter ‘K’ — from what people Knew yesterday — and repackages it as new today.
When Bill Gates famously said, “Most people overestimate what they can achieve in a year and underestimate what they can achieve in ten years,” from that point on this insight became known as Gates' Law. Is that so?
Upon closer inspection, it's apparent Gates had merely rephrased Einstein's above-mentioned insight. After all, Gates' so-called law merely dusts off Nature's age-old law of growth.
As Einstein wisely points out, compound interest is the world's most powerful. Why? Simply put, the world itself originated from, well, plain ole compound interest. After all,
JaiHind.. 🇮🇳 JaiBharat..
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