May 20 (edited) • 😎 Business
Compound Interest
Did you know Compound Interest is said to be One of the Wonders of the World.
Google defines it as: Compound Interest is essentially "interest on interest." It occurs when you earn interest not only on your initial money (the principal) but also on the accumulated interest from previous periods. This stacking effect causes savings or investments to grow at an increasingly faster rate over time.
One of the most famous examples of the power of Compound Interest is Ronald Read. He was a Vermont janitor and gas station attendant who died in 2014. He left $8 million to charity.
He never earned more than minimum wage in his life. His secret was buying dividend paying stocks and not selling them for decades.
But the craziest compound interest story in history might belong to Benjamin Franklin.
When he died in 1790, he left £1,000 each to the cities of Boston and Philadelphia but with one condition: they couldn't touch it for 200 years. By 1990, Boston's share had grown to over $5 million.
If you deposit $1,000 today accumulating 7% interest each year, after 50 years you will have almost 30k. $29,457 to be exact.
The stock market averages 10% each year... but when you calculate inflation... its around 6-7% annual return.
What if you invested 10k instead of $1,000... you would be looking at 294k after 50 years with a 7% annual return.
Why am I telling you this??? Is it to invest in the stock market? Well, that's not a bad idea...
Benjamin Franklin called Compound Interest the "stone of wise men".
Compounding is exponential, not linear. The curve looks almost flat for the first few decades, then suddenly rockets upward. The last 20 years of a 200-year investment contribute more than the first 150 years combined.
I'm telling you this so you can understand the spiritual law of consistency and faithfulness. These are two characteristics that look basic and boring but over time you will bear exponential fruit. Most people are looking for the next best thing, newer grass, but wise men understand the grass is greenest where you water it.
Who would call you consistent and faithful? Would your job? Your Church? Your family?
Remember the fruit comes from where you plant seeds. If you're not seeing more fruit, or the type of fruit you want... ask what you've been sowing.
Faithfulness is a characteristic of God. It may seem basic but it will pay over time.
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Compound Interest
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