The Myth of Compounding Interest

by James Altucher
Daily Reckoning

Editor’s note: It’s one of the oldest rules of saving and investing: the wonders of compound interest. But can you rely upon it to build wealth? Today eccentric former hedge fund manager gives you his surprising answer.

Dear Reader,

Albert Einstein supposedly said, “The eighth wonder of the world is compound interest.”

The idea is that if you put some money in the bank and let it sit there or invest it wisely, it will somehow “compound” into millions of dollars by the time you need it. At first take, it does sound somewhat wondrous.

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