You are the person who saves and invest all time without any worry. For this, I have sacrifice my desire to buy things what I love and what I can be used for showing my status and my entertainment stuff. Suppose, I am person who only focus to save and invest, save and invest. It becomes best friend who saves and invest the money Compounding is Best Friend Who Saves and Invest and Enemy Who Take the LoanĬompounding is wonderful in the world. My duty is not to use this 100 but if I can do it, increase the amount of principal by saving more if I am interested toĢ. It is the power of interest because compound interest has power to strength your money by joining it and interest on it. 100 with 10% interest, it will 4 times with the help of compound interest. See practical, how small amount becomes big with compound interestĪmount = Principal ( 1+ rate of interest/100)^ time Compound interest means interest on interest if you do not take saved or invested money for personal use in short period of time and you leave it for long growth. Second, compound interest has the power to build big wealth. In 35.2 years, your principal will be 32 times from its initial value In 28 years, your principal will be 16 times from its initial value In 21.8 years, your principal will be 8 times from its initial value Your principal will be in 4 Times of its initial value

You give time, you do not withdraw your principal and if you do not consume your earning and re-invest, it will walk long and long without stop and with simple formula of 72

Suppose, if you are getting only 10% return on your investment, first two years, you will not see any effect but if Compounding Walk Slow But It Walk Non-Stop without TiredĬompounding has great quality, it is not in high speed. If he told “eighth wonder of the world,” saying, “he who understands it, earns it he who doesn’t, pays for it.” It means, it has powerįollowing are the main reasons to Say Compounding as Eighth Wonder of of the Worldġ. This is great finance question you have asked from me 'Why Einstein told compounding eighth wonder of of the world?įirst of all, you know that Einstein was great scientist.

The 8th wonder of the world einstein