Einstein's "8th Wonder of the World"
You might have heard of – or even visited in person – the “Seven Wonders of the World”, but have you heard of the “8th Wonder of the World”? Purportedly identified by the famed Albert Einstein, and with the power to rival the creations of great ancient civilisations, this “wonder” is something we've all experienced – the “compounding effect”.
Compound interest is common knowledge for many of us, yet relatively few of us really understand the power of compound interest – or can use it well. Combine compound interest with time, and you can grow an insignificant investment into a hefty fortune. It's little wonder that people call it the “8th Wonder of the World”!
Say for example we invest $100 at a rate-of-return of 20% p.a., and at the end of year we gain $20. We re-invest the whole sum – $120 – in the second year, and in just 10 years our investment will have grown six-fold!
The above example assumes that no additional investments have been made other than the principal sum. Most long term investment tools on the market such as MPF make monthly contributions, yielding even better returns under the compounding effect! Invest early and let time be your best ally in growing your wealth – and you too can witness the “8th Wonder of the World”!