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  • daclothier

Einstein was right when he allegedly said compound interest is the eighth wonder of the world.

Updated: Oct 9, 2021

Compound interest isn't a phrase that people think of on a daily basis but I'm hoping that this article may change that.

So the debate that rages online is whether Albert Einstein or Benjamin Franklin said the following phrase:

"Compound Interest is the eighth wonder of the world. He who understands it, earns it...he who doesn't pays it."

The reality is it doesn't matter who said this, what matters is that yo⁷u understand the power of compound interest. As compound interest starts an investment off like a steam train, very slow at first as it start moving, then gradually gets quicker until its is speeding along at great speed. It may take a while to get to that speed but once it does its flying!

Let's take a look at a regular annual investment and then compare it against a daily compounded investment of the same amount.

In the first scenario I am investing $1,000 in to a long term savings plan earning 1% per year but I will reinvest my interest payment back at the end of each year:

My return now looks like this:

By compounding the $1000 & interest payment each year I have now made $349.69 on top of my initial $1,000 investment.

However Crypto allows us to put compounding on steroids. There are many sites or vaults that offer a % daily return that can be compounded. For example Drip offers a 1% daily return. If I was able to compound 1% daily for just a year what would I get as a return?

Here are the results:

By mixing the power of compounding daily with Crypto you would be able to get a substantially bigger return on your investment. That initial investment of $1,000 would turn into $37,783.43 by the end of the first year! This is much better than waiting 30 years to just get $349.69.

This not only shows the us the power of compounding your investments but when mixing it with crypto its an unstoppable force!

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