The Eighth Wonder of the World
Albert Einstein, arguably one of the most intelligent people who ever lived, was asked what he thought was the greatest of mankind's discoveries. His answer: "compound interest." He went so far as to call it the eighth wonder of the world.
As an example of just how powerful this can be, consider the following scenario.
Let's say Christopher Columbus made an investment in the new world's future in 1492. If Chris had placed a single penny in a 6% interest-bearing account and instructed someone to remove the interest every year, the value of the interest earned to date (2005) would be almost 31 cents. Not too much to write home about, is it.
But if the young explorer had placed the same paltry investment of one cent into the same interest-bearing account but LEFT the earned interest to compound—earning interest upon the interest—the results would be drastically different.
What would you guess the account would be worth now? $10,000? $100,000? A million? 10 million? 100 million?
In actuality, the resulting balance of a penny invested at 6% COMPOUND interest for 513 years would be $95,919,936,112. That's 95 BILLION!
Not bad for a single penny. Do you see what Al Einstein was so worked up about? It's powerful.
We may not have 513 years to make compound interest work for us, but we can employ it nonetheless.
It doesn't matter how old or young you are, you have to start now. Get the power and the momentum of compound interest working for you.
Action Point
Pay yourself first. Save a part of EVERYTHING you earn and invest it. You can save 10% of what you earn. And if you start young, you're GUARANTEED to be a millionaire by the time you retire. Pay the person who will make you rich—YOU!
Get out of debt (unpaid debt is like compound interest in reverse), invest in yourself, and reap the power of the Eighth Wonder of the World.
Source : http://www.generalinfo.in/?p=102
There was a one hour interview on CNBC with Warren Buffet, the second richest man who has donated $31 billion to charity. Following are some very interesting aspects of his life
1. He bought his first share at age 11 and he now regrets that he started too late!
Things were very cheap that time Encourage your children to invest
2. He bought a small farm at age 14 with savings from delivering newspapers.
One could have bought many things with little savings
Encourage your children to start some kind of business
3. He still lives in the same small 3-bedroom house in mid-town Omaha , that he bought after he got married 50 years ago. He says that he has everything he needs in that house. His house does not have a wall or a fence.
Don’t buy more than what you “really need” and encourage your children to do and think the same
4. He drives his own car everywhere and does not have a driver or security people around him.
You are what you are
5. He never travels by private jet, although he owns the world’s largest private jet company.
Always think how you can accomplish things economically
6. His company, Berkshire Hathaway, owns 63 companies. He writes only one letter each year to the CEOs of these companies, giving them goals for the year. He never holds meetings or calls them on a regular basis.
Assign the right people to the right jobs
7. He has given his CEO’s only two rules.
Rule number 1: do not lose any of your share holder’s money.
Rule number 2: Do not forget rule number 1.
Set goals and make sure people focus on them
8. He does not socialize with the high society crowd. His pass time after he gets home is to make himself some pop corn and watch Television.
Don’t try to show off, just be your self and do what you enjoy doing
Warren Buffet does not carry a cell phone, nor has a computer on his desk.
Bill Gates, the world’s richest man met him for the first time only 5 years ago. Bill Gates did not think he had anything in common with Warren Buffet. So he had scheduled his meeting only for half hour. But when Gates met him, the meeting lasted for ten hours and Bill Gates became a devotee of Warren Buffet.
His advice to young people:
“Stay away from credit cards (bank loans) and invest in yourself and Remember:
Money doesn’t create man but it is the man who created money.
Live your life as simple as you are.
Don’t do what others say, just listen them, but do what you feel good.
Don’t go on brand name; just wear those things in which you feel comfortable.
Don’t waste your money on unnecessary things; just spend on them who really in need rather.
After all it’s your life then why give chance to others to rule our life.”
“The HAPPIEST people DONOT necessarily have the BEST of all.
They simply APPRECIATE what they find on their way”
Let us choose the way to live
