Help your child retire a millionaire on a $2,000 investment
This was the eye-catching premise of a Hatch advert that circulated New Zealand in June of this year. Hatch were not claiming that they had discovered some incredible investment opportunity. They were simply illustrating the power of compound returns. The article explains that if you invested $2,040 when your child is born, and it grows at 10% per year, by the age of 65 it will be worth more than $1,000,000. There is a famous quote attributed to Albert Einstein: " Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn't, pays it ." While it is highly likely that he said no such thing, the power of compounding is truly a wonder to behold. As Doug McCutcheon pointed out in an article in the Globe & Mail: "If you invest a sum of money at 10% for five years, you will multiply your wealth by 1.6 times. If you invest your capital at that rate for 50 years, you will not multiply your wealth by 16 tim