Is Einstein only a scientist?
The magic of compound interest has been admired by many notable people. Albert Einstein stands out:
“Compound interest is the eighth wonder of the world. He who understands it earns it…he who doesn’t…pays it.”
“The strongest force in the universe is Compound Interest.”
An ingot of gold will still weigh the same in 15 years, but an investment in the shares of a successful gold mining company paying regular dividends of 5% will double in value in 15 years when these dividends (probably effectively tax free) are reinvested in new shares in that company.
Regular saving of small amounts is magic. Regular investment of dividends used to buy shares in the same company, especially one offering a dividend reinvestment plan, is magic with bells on.
If grandparents set up a $100 a month savings plan into a managed fund dedicated to making a cash gift to each grandchild on their 21st (or even 18th) birthday, their smiles would be huge.
Do the arithmetic for yourself!