The Magic Of Compound Interest: World Renowned Physicist Albert Einstein called it the eighth wonder of the world. Specifically he quoted saying "Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it."
Now Anyone can attach a quote to a picture of someone and called it a quote from that person. But in this case, it is highly probable that he said it.
Now, what is compound interest? It is crucial to know what it is if you are an investor because without the understanding of it, you would not know how money compounds overtime when you reinvest. To understand compound interest, we must understand simple interest. Lets say we want to invest one hundred dollars in an cryptocurrency investment programme. Now the simple interest that they offer is 1% daily. Not a bad return for your money eh. So each day you have one dollar that accumulates and you are able to cash out anytime. This is simple enough to comprehend. But what happens in compound interest is that you reinvest again everytime you reach an minimum amount that you can do so. Lets say we have an minimum of ten dollars. And we let our interest grow our capital of one hundred dollars and let it accumulate to ten dollars which takes ten days and we reinvest. When we reinvest our principal sum of one hundred dollars become one hundred and ten dollars and lets say we decided to stop compounding from here and now our principle has grown and our interest will take one percent of a higher principle sum. So we receive higher returns of one dollar and ten cents as compared to our initial return daily of one dollar. If you chose to let it compound for days to end, you have to stop at some point because how are you going to have any available money to cash out? So depending on our investment programme's amount of days that it locks our capital we have to plan when we are going to stop compounding and let our money flow to spendable money. Now when compound interest is applied financially we can see the magic of it. But not only can it be applied financially, it can also be applied to our lives. The compound effect. If we are able to consistently do the small things in life that you do daily it adds up overtime and you will benefit greatly.
