Mature Life Features

. . . is always welcome and

it’s a bridge to Friday’s Super Supper Shuttle

that gets us to

Olive Garden,

Old Chicago Pizza,

Village Inn and

In.N.Out Burger this week.

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Compound Interest Beats the Odds

Famed physicist Albert Einstein is credited with describing the most powerful force in the universe as “compound interest.”

Yet just as many people who don’t understand his theory of relativity also don’t understand what he was driving at in this instance.

Three out of 10 Americans think their best chance of amassing half a comfortable financial cushion in their lifetime is to win a lottery or sweepstakes, according to a Consumer Federation of America poll. The odds of winning a lottery are one in 10,000,000 to 20,000,000.

When the Consumer Federation asked how much money you would earn by investing $25 a week for 40 years at a 7 percent return, no one guesses as high as the actual amount — $286,640. Invest $50 a week at that same 7 percent rate – the average annual return of the Standard and Poors 500 — for the same period and you double that amount, which is well more than half a million dollars.

What makes compound interest so powerful is that you not only earn interest on the money you put into an investment, but you also earn interest on the interest. If you put $100 in an investment program at 7 percent, you should have $107 at the end of the first year. The next year you earn 7 percent on the $107 not just the original $100.