Quote investigator also found some earlier quotes claiming that compound interest is the “greatest invention”, but none of them involve Einstein in common‐size analysis any way until well after his death. 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.” We suspect that this perspective on the power of compound interest is a fairly modern invention, one which has been retroactively placed into the mouth of a prominent dead person to give it more punch. References continued to proliferate, but QI will stop the presentation here because the citations above provide a reasonable sample. One question I was asked at practically every stop was, “What’s the greatest invention of all time? ” I finally worked up an acceptable answer to this one, one I hoped would preserve my goal of presenting positive, optimistic views of science.
For Einstein, advanced education is not job training, but training to perform at high levels in any situation, job or otherwise. This agrees with my view on education, with its worth being measured in more than just financial return on investment. Would Einstein feel the same way now, with a college education costing several multiples more than it did in his time, even after taking inflation into account? He clearly sees the importance of cognitive ability and education for growing human capital, which has a positive effect on options for long-term wealth. 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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Social security is squarely based on what has been called the eighth wonder of the world—compound interest. 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. I’d like to know if it was made up or if Einstein ever said anything close to this.
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His breakthrough in the understanding of the physical universe came from his ability to imagine how the world might work, and then ask himself questions and solve problems to determine which theories could be tested. For the most part, he let other scientists worry about the testing part, giving himself room for his thoughts to consider the world in ways no one had considered it previously. He didn’t like the militaristic nature of his schools, where pupils were not encouraged to ask questions, and learning was affected through rote memorization. The young Einstein had no interest in this type of training to blindly worship authority.
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I early inquired the rate of interest on invested money, and worried my child’s brain into an understanding of the virtues and excellencies of that remarkable invention of man, compound interest. 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. This blog explains everyday economics and the Fed, while also spotlighting St. Louis Fed people and programs. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System. I’d argue that taking advantage of compound interest is the single most average total assets powerful action that an individual investor can leverage to build wealth. This powerful force allows someone to invest a sum of money today that will grow into a much larger amount.
Sometimes a comment is attributed to a famous individual to increase the prestige and believability of the comment. Also, a quotation from a famous person is often considered more interesting and entertaining. 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.
- Despite his initial problems with the regimented style of school, Einstein strongly valued the cognitive skills he gained from his later studies.
- 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.
- For savers, it means earning interest on your original principal—plus on the interest your investment generates.
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.
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Fans of gurus will continue to stand up for their heroes despite displays of lack of character and lack of sense. Fans are invested in their heroes; to admit their guru isn’t perfect is to admit they wasted time, money, and standard cost systems energy. A superfan perceives an attack on Robert Kioysaki’s business practices or a criticism of his sales techniques as an attack on the man and his following. A criticism of Dave Ramsey’s approach to financial advice is dismissed without consideration; after all, he’s the successful author. He might have; the sentiment matches what seems to be this particular genius’s sense of humor.