The Miracle of Compound Interest
by Jeff W. Griffin
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.
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