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The Wonders of Interest


Take care of the pennies and the pounds will take :are of themselves.

The man intent on building a fortune can not too often review the fundamental essen tials. It is only by keeping them constantly in mind that he can succeed, for fortune build ing results, not from sporadic action but from a well thought-out plan that is constantly operative. Let us repeat these fundamental principles : i. The builder must aim to secure such a fortune in money as lies reasonably within his opportunity.

2. He must store up mental resources as well as money.

3. Health, Skill, and Leisure are his great assets.

4.. He must master all that is implied in appropriation and daily accounts.

5. He must constantly remember that he is working with his strength of to-day in order to protect himself in the days of lessen ing strength to come.

6. And he must not so slavishly attach him self to a scheme of saving that he fails to get joy from the days of his toil.

There are many ways and means of dis posing of savings. We will take them up one by one, in subsequent chapters. They all, however, have one end in view; namely, to provide safety and increase. In order that savings may be safe, a depository of some kind must be found for them that is as wisely safeguarded as human ingenuity can devise. In order that they may increase, they must be left undisturbed over a period of time, for it is Time that increases the value of savings.

Thus, money is put into savings banks, into bonds, or other investments, that it may earn interest. Interest is payment made by the user of money to the man who owns it, just as rent is the payment made by the user of a house to the man who owns it. Hence, interest is cash received. Some people, par ticularly the French, Dutch, and Germans have become noted the world over for their thrift. One of their cardinal rules is : never spend interest ; add it to principal and make it earn interest in its turn.

When savings are invested wisely and the income is husbanded, the growth of princi pal is truly remarkable. One dollar saved

weekly for twenty years amounts to ten hun dred and forty dollars as principal but if deposited regularly and never disturbed, in a savings bank that pays four per cent com pound interest, this ten hundred and forty dollars will earn in twenty years, as interest, five hundred and sixty-two dollars, making a total of $1,612.00.

Small sums regularly set aside and left to work over a period of ten, twenty, or thirty years, grow to mighty sums.

If a young man begins at the age of twenty five to save for a pension at sixty-five, that is, forty years later, each thousand dollars of the amount he desires, will cost him an an nual deposit of ten dollars and twelve cents, at four per cent, compound interest. Or, it may be expressed thus : less than three cents a day over a period of forty years, amounts to one thousand dollars.

Everybody has the three cents, but few have forty years of patience.

At the same rate of interest, one dollar a week, deposited regularly for twenty-five years, amounts to nearly twenty-three hun dred dollars.

In the first instance the thousand dollars costs four hundred and four dollars and eighty cents in money deposited. The interest adds six hundred and ninety-five dollars and twenty cents.

In the second, the total of two thousand, two hundred and fifty-two dollars costs thir teen hundred dollars, and the interest adds nine hundred and fifty-two dollars.

These are certainly encouraging and in spiring figures. Beginning with even a small sum, one can rapidly work out a fortune, on paper. But actually to work out a fortune in money requires great moral courage and strength. A man who determines to place one dollar in the savings bank every Satur day for a period of twenty years, is enter ing into a contract to do a series of actions one thousand and forty times. The actions are these: i. He must get the dollar together during the week.

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