Compound Interest is the Eighth Wonder of the World

“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” Albert Einstein We completely agree with the Albert Einstein. But just to give you an idea as how powerful compound interest can be, we would like to share a great story with you today that was recently published on Wall Street Journal (http://www.wsj.com/articles/route-to-an-8-million-portfolio-started-with...). It’s about Ronald Read, who was working as a maintenance worker and a janitor at JC Penny after working years at a gas station. There seemed to be nothing out of the ordinary about Ronald until he passed away last June and left $8 million dollar estate, most of which is to be donated to a local hospital and a library. You might be wondering how Ronald who mostly worked at minimum wage jobs acquired all this wealth. Well, as it turns out Ronald had a very simple strategy for investing in the stock market, just BUY and HOLD and earn the dividends. And he had been doing that for decades before he passed away. At the time of his death, he owned stocks of at least 95 companies, most of which were dividend paying companies and he made sure to reinvest them every time. He mostly invested in companies which made sense to him and did not take any sorts of risk. But besides just owning the right stocks, we can all learn something more from Ronald’s life. According to his friends, Ronald had amazing level of patience and he lived all his life well within his means. That helped him save up a lot more than a common American and if he wanted to he could have had a really comfortable retirement, though he chose to donate most of his wealth. Sometimes little lessons in life can help you a long way!