The Eighth Wonder of the World
Albert Einstein supposedly called compound interest the eighth wonder of the world. Why? Because it is a force so powerful that it can turn small amounts into large fortunes — if you give it enough time.
What is compound interest?
Simple interest only pays you on your original deposit. For example: you put $1,000 in the bank at 10% per year — after one year you have $1,100, after two years $1,200.
Compound interest works differently: the interest you earn is added to your capital, and then that bigger amount also starts earning interest. In other words: money makes more money.
Example 1 – simple math
You invest $1,000 at 10% per year:
- After 1 year: $1,100
- After 2 years: $1,210 (10% of 1,100, not just 1,000)
- After 10 years: about $2,590
That’s more than double what you would get with simple interest.
Example 2 – long horizon
Imagine saving $1,000 every year and investing it at 8% return:
- After 10 years: about $14,000
- After 20 years: over $45,000
- After 30 years: about $113,000
Even though you only put in $30,000 yourself, the rest comes from the “magic” of compounding.
Why is it a wonder?
Compound interest rewards time and patience. You don’t need to be a genius or lucky — just consistent. The longer your money works, the faster it grows, because each new layer of interest builds on top of the previous one.
Think of it like a snowball rolling down a hill. At first it’s small, but as it keeps rolling, it gathers more and more snow, and soon it grows faster and faster.
And now imagine it's power while making 5-10% a month i DeFi...
