Moving to the United States and becoming a citizen of the country was important to Einstein. He loved the idea that he and others could question authority without fear of reprisal. Einstein components of balance sheet also enjoyed the lack of a class system as was prevalent throughout Europe.
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 is my car an asset or a liability or impossible for some. But for at least those reading Consumerism Commentary, there should be enough opportunity to move towards financial independence.
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He believed that humans were given brains so they could do much more than trust received knowledge unquestioningly. For an example of compound interest, let’s assume an 8% interest rate with a retirement age of 65. The Rule of 72 is an easy compound interest calculation to quickly determine how long it will take to double your money based on the interest rate. At a 2% interest rate, it would take 36 years to double your money. At a 12% interest rate, it would only take six years to double your money.
How the Rule of 72 Works
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.
One reply on “Compound Interest Is Man’s Greatest Invention”
What we can appreciate from Einstein’s philosophy is that society is as important as the individual, and individuals, particularly those who are successful, can help society to a greater extent without sacrificing their success. Also, regulations free from corruption help guide capitalism so that opportunities are available for more citizens. Albert Einstein definitely leaned towards the socialist end of the economic spectrum, but he always emphasized the important of individual freedom, democracy, and personal liberty. He was not a fan of communism in Russia, nor was he a supporter of German fascism or nationalism. The United States was politically the best environment for him, particularly with his belief that art and science relied on the availability and encouragement of individualism.
Capitalism can be destructive to society
However, 1916 is not necessarily the origin of this hyperbolic statement, and future researchers may locate earlier citations. 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. QI hypothesizes that the statement was crafted by an unknown advertising copy writer. Over the years it has been reassigned to famous people to make the comment sound more impressive and to encourage individuals to open bank accounts or purchase interest-bearing securities. These examples illustrate the importance of the interest rate and duration of your investments.
- Being thankful for these opportunities is certainly one reason not to throw it away by making bad decisions with money.
- In 1916 a character in an advertisement in a California newspaper called “compound interest” the “greatest invention the world has ever produced”.
- 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?
- One question I was asked at practically every stop was, “What’s the greatest invention of all time?
- He was not a fan of communism in Russia, nor was he a supporter of German fascism or nationalism.
- For instance, the purchasing power of $787,180 today would be approximately $434,580 in 30 years, assuming a 2% average inflation rate.
Inflation occurs when the prices of goods and services increase over time. The Federal Reserve’s “dual mandate” includes keeping prices stable, and monetary policymakers have equated price stability with a low, measured inflation rate targeted at 2% over the longer run. In personal finance articles I frequently find quotes injected to attribute some further relevance to one’s position. Despite his world travels and, especially later in his life, his ability to command how to build a flexible budget variance analysis in excel top salaries and fees, he maintained modest living environments. But it is not particularly easy for one to climb up out of the working class—especially if he is handicapped by the possession of ideals and illusions. I lived on a ranch in California, and I was hard put to find the ladder whereby to climb.
QI has found no substantive evidence that Albert Einstein, Baron Rothschild, or John D. Rockefeller employed the saying. The point is to illustrate that the purchasing power of money is expected to be less in the future. This should always be considered when reviewing long-term projections. For instance, the purchasing power of $787,180 today would be approximately $434,580 in 30 years, assuming a 2% average inflation rate. We’d be remiss to talk about future projections without mentioning inflation.