Einstein's 8th Wonder of the World - CLEARWEALTH Asset Management (2024)

Einstein's 8th Wonder of the World - CLEARWEALTH Asset Management (1)And this is where Albert Einstein comes into play. According to Einstein, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” At first this quote might seem like a bit of an exaggeration but the math behind it shows that it is not.

Let me give you an interesting example: if I were to offer you the choice between an immediate cash payment of one million dollars or a magic penny that doubled every day for 30 days, which one would you take?

Now if you are like most people, at first you might jump on the million dollar deal. But if you break out your calculator and double one penny for 30 days you will be amazed that on day 30 your penny would be worth over $5,000,000.

I know it’s a total mind blow but here is the take away:

Because compounding has such a huge impact on the outcome of money in the later years, it is crucial that you start saving early. As you test this equation you will see that even on day 20 your penny is only worth about $5000. The magic occurs in the later years since the compounding is being applied to increasingly larger numbers.

Now, just for fun, imagine in the above example that each period represented a year instead of a day. And those 30 years were your working years when you had the choice of putting something aside for retirement.

Now imagine that for whatever reason, for the first 10 years you decided that you did not need to worry about retirement or couldn’t afford to put anything aside or whatever other excuse you might come up with. In the above example, you would have only had 20 compounding periods instead of 30 and your penny would have been worth $5242 instead of $5,368,709. Amazing but true!

So if you are telling yourself that you will put aside money for tomorrow “when you can afford to” or “when you make more money” or whatever, you are putting yourself at a huge disadvantage.

Regardless of how much you make, the sooner you get started the better the 8th wonder of the world will start working for you—and a penny saved today could mean millions in retirement.

Happy compounding.

photo credit: Jeannette E. Spaghetti via photopin cc

Einstein's 8th Wonder of the World - CLEARWEALTH Asset Management (2024)

FAQs

What did Einstein say was the 8th wonder of the world? ›

The quote, "Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn't, pays it," is often attributed to Albert Einstein.

What is the 8th wonder of the world investment? ›

It was the renowned scientist and theoretical physicist Albert Einstein who said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.” These words are reflected by investor Warren Buffett, who is most associated with the basic wealth building strategy.

What is considered the 8th wonder of the world? ›

Angkor Wat, located in Cambodia, is now considered the eighth Wonder of the World, beating Italy's Pompeii. The title of the eighth Wonder of the World is given to outstanding buildings or projects, and Angkor Wat has gained this recognition.

What is the eighth wonder of the world finance? ›

Compound interest is the eighth wonder of the world. He who understands it earns it … he who doesn't … pays it,” Albert Einstein famously said. If you earn compounding interest, you can become rich. But if you pay compounding interest, you will be in a debt spiral.

What was the 8th wonder of the world destroyed? ›

The greatest tourism and geoscience attraction in the southern hemisphere, in the nineteenth century were the siliceous Pink and White Terraces, the lost Eighth Wonder of the World in New Zealand. In 1886, the Mount Tarawera eruption buried the terraces.

What did Albert Einstein say about the world? ›

The world as we have created it is a process of our thinking. It cannot be changed without changing our thinking. The most beautiful experience we can have is the mysterious. It is the fundamental emotion that stands at the cradle of true art and true science.

What is the most valuable investment in the world? ›

What Is the Most Valuable Asset by Market Cap? The answer to what asset has the highest market cap actually isn't a company: Gold has the highest market cap in the world. The market cap of gold is a dazzling $12.732 trillion!

What is Oprah investing in? ›

Some of her notable investments include: Apeel Sciences: A company that develops plant-derived food coatings to extend the shelf life of fresh produce. Oatly: A Swedish oat-milk company that Winfrey backed during its initial public offering (IPO) in 2021.

What was the 8th wonder of the world in 2013? ›

Nov. 1, 2013— -- The lakes, glaciers, waterfalls and granite towers of Chile's Torres del Paine are a wonder to behold. The "8th Wonder," one travel website says.

What is the 8th wonder of the world 2024? ›

Angkor Wat is a large temple complex located in Cambodia which is world famous for its architectural style and its historical significance. The temple complex of Angkor Wat has recently been given the title of the 8th wonder of the world, beating Italy's Pompeii.

Is Niagara Falls the 8th wonder of the world? ›

Its massive display of water flow at Bridal Veil Falls, Horseshoe Falls, and American Falls with an average of 2,400,000 to 3,150,000 gallons of water falls per minute is enough to make it the 8th wonder of the world.

What is the 8th wonder of the world China? ›

One of the greatest archaeological finds of the twentieth century, the terracotta warriors are often described as the eighth wonder of the world. NGV curator Wayne Crothers shares the story behind their discovery in 1974 and what these ancient artefacts tell us about Chinese history and culture.

What is the highest loan from World Finance? ›

Loan Amounts

World Finance offers personal installment loans from roughly $450 – $10,000.

What kind of loans does the World Bank make? ›

We provide low-interest loans, zero to low-interest credits, and grants to developing countries. These support a wide array of investments in such areas as education, health, public administration, infrastructure, financial and private sector development, agriculture, and environmental and natural resource management.

What is the 8th wonder of the world Warren Buffett? ›

Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.” Einstein isn't the only smart person that understands the power of compound interest.

What is the only remaining 7 wonder of the world? ›

The Great Pyramid. The Great Pyramid, the largest of the Pyramids of Giza, is the only Great Wonder still standing. It was build more than 4,000 years ago.

What was declared the 7th wonder of the ancient world? ›

These ancient wonders are Colossus of Rhodes, Great Pyramid of Giza, Hanging Gardens of Babylon, Statue of Zeus at Olympia, Temple of Artemis at Ephesus, Mausoleum at Halicarnassus, and Lighthouse of Alexandria.

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