The Miracle of Compound Interest
Albert Einstein was once asked what he thought was the most
powerful force in the universe. He answered: Compound Interest!
Now, I would have thought that Albert Einstein would have
considered things other than money. But, when you take another
look at it, he may be right. At least, he may have suggested the
thing that most of us would like to have.
For the few reading this that have no idea what compound
interest is, let me explain briefly. Let's say you deposit a
certain amount in a savings account (bad idea) and you leave it
there for a while.
On day one you deposit $100 and the bank is paying you 4%
compounded daily. On the second day your balance in the account
will be $104. On day two your balance will be $108.16. Day 3
will yield $112.48 and so it goes. Until on day 18 your money
have doubled to an account balance of $202.58.
Doubling one's money in just 18 days and not having done a
thing to accomplish that is an amazing feat if you ask me. In
fact I might agree with Mr. Einstein to a degree. I am sure that
compound interest might be a force that I want working in my
life. It has all the possibility of making one's life that of
what we dream.
What If?
So, I was thinking to myself what if there was an internet
based business that revolved around this principle of compound
interest on the internet? That might be one of the easiest ways
to earn money. In fact, the easiest. You put money in and it
multiplies for you like a bunch of little bunnies. I don't know
about you, but, I'd go for that!
When I was young I used to hear of compound interest accounts a
great deal more than I do today. I suppose bankers have just
become more greedy or the wild fluctuation of interest rates
over the last 2 or 3 decades have made it more difficult for
banks to pay a rate that keeps up with inflation, recession and
all the other financial pressures you can imagine operating in
the world today. Although have long been familiar with the
concept it just wasn't something I felt I could do.
My mind kept telling me to get involved with such a paying plan
one would have to have a great amount to deposit in an account.
Then where would I find such a thing? Having been working on the
internet for a couple of years I had yet to come across such a
thing. But then, I did.
In plain words there are such things on the internet and I have
found some that require only $10 to start an account. What
really bothers me about such things is that I have a very
difficult time telling folks about it because they don't believe
me.
Everyone says, ?oh yeah, I know about compound interest.? But
then, those same people will look at the interest I am being
paid and they immediately start telling me I'm being scammed and
suckered. Having done my due diligence I have found that the
chance of that is fairly small.
So, what if I was being suckered? Is there anything I could do
to minimize my position? I wondered. And at once it was apparent
to me. I decided to treat my investment as I would a night at
the craps table. I would only invest what I was prepared to
lose. So, let's say we play it that way. Let's say we have
$1,000 to lose without thinking about jumping off a tall
building. I could wait for my money to double and then take my
original money out leaving only the interest earning interest.
And that is how I play it.
One of the programs that I am involved in pays an incredible
rate of up to 25% per month compounded daily. Let me show you
some calculated results using that initial $1,000.
$1,000 over one year would result in a total balance of
$14,551.92. At that time I would withdraw my $1,000 and cast the
remaining interest back in to doing what it was doing before.
At the end of the second year my accrued amount would be an
incredible $197,206.39 and the third year would put me into the
millions. An unbelievable $2,869,730. Wow, like winning the
lottery and how much did I risk? Only $1,000. That was my
complete exposure to the program. Never mind that some of the
programs are run by some of the biggest banks in the world. You
hear their names everyday on CNN or FOX.
The miracle of compound interest. It exists out there folks. It
works because some entity like a bank is lending that money out
at a horrific rate or is investing in futures and doing so by
borrowing the money from you and I to do so.
What are they making on our money? Probably 40 to 70%. It is
worth it for them to pay us to put the money out there for them
to use. The trouble with all this is ?US?, I mean you and I.
Well, maybe not me. Do we fear making a mistake so much that we
cannot bear to lose an amount that will not change our life if
we do. Because if we choose to take the risk on a small amount
we might end up having life-changing results. The only mistake
in life is believing our fear of making one.
A.C. Benson said, ?One's mind has a way of making itself up in
the background, and it suddenly becomes clear what one means to
do.? This is what anyone that truly wants to succeed to the Nth
degree needs to think about. Risk and reward and the miracle of
compound interest.