The Jeffersonian. [volume] (Stroudsburg, Pa.) 1853-1911, 1872-08-15
How Man may Become Rich on Small
Beginnings.

The gradually increasing rate Of inter-
est should make people wary of borrow
ing money for speculative purposes, and
especially of hiring it for the purchase of
unproductlve property, or in the expecta-
ton OF obtaining permanently high rate
OF interest which every few years causes
a general breaking, up of business, when
property and products fall in prices
This also it is which causes wealth grad
ually but steadily to concentrate into the
hands of paratively few persons in the
community. Take any series of ten,
twenty, or thirty years, or more, and the
longer the series the more positive and
conclusive becomes the evidence Of tho
fact and it will be seen that the most
profitable business in the world is the lend
ing of money. The high rate of money,
high taxes, must, In the course of few
years, tend to such concentration, Of
wealth as cannot fail to be injurious to
society, and will ultimately so straiteu the
debtor closes as to the necessitate to
very great extent the process of wiping
out old accounts and beginning new
\ few examples will be sufficient to IL
lustrate the great power of interest:
y man buys house for which he pays
$4,000. He leases it and charges the
tenant seven per cent. upon its cost, clear
OF insurance, taxes and repairs
The rent is payable quarterly. A rate
of interest OF seven per annum, paid
quarterly, will accumulate sum equal
the principal loaned or invested in pro-
perty in ten years. Ia the first period
of ten years, therefore, his rents build
him another as costly house as the first.
ln twenty years his rents build three such
houses thirty years seven houses In for
tyone houses in sixty years sixty three
houses, and in seventy years one huad-
red and twenty seven houses In seventy
years all these are built from the accumu-
lated rents of one house. The houses are
worth 81 1,270,000, which sum has been
paid for seventy years rents OF one house
worth $4,000. If, instead of being in
vested in the house and lot, the $4,000
were loaned on interest at seven per cent,
and the interest collected and reloaDed
quarterly, the money would accumulate
precise y the same amount as the property.
Take another illustration of the power
in interest. Two mechanics Just come Of
age, are good to earn dollar day over
and above his expenses Every six.
months they invest the nancy thus earned
at seven per cent. interest, the interest
payable half yearly. These men earn an
average of dollar day besides their ex-
penses 300 days in each year, during for
ty years and four months. Their age is
then 6l years and months. Each earns
by labor $500 for 40 years, or. for the
whole period, sl2, l20-together with
$4,000. But the interest on their re-
turns, loaned half yearly, for period of
40 years and four months amounts to
SlO4, ,550,7O, which, added to the amount
OF $2l 200 earned by their labor, makes
the aggregate, Sl2S, 1870 The inter
est on the sun S24, 200 earned by their
labor Is, $l04 $50 70-more than four
and quarter times greater than the
amount they have earned by their labor.
Suppose the two men to live twenty
years aud two months longer, that is to
the age of eighty-one years and six
months, and continue to loan their money.
During this period it will double twice,
making the total accumulation in sixty
years and six months S5l5,002S0 The
two men do not work during the last
twenty years and two months, and expend
Of the income for living during that per-
iod $4,000. so, leaving to their heirs
S3UU,000. In forty years and four months
they earn by their labor s24 200, aud live
twenty years on their money without la
bor. Subtract the money earned by la
Dor, S2l 200, and the remainder accumu-
lated by interest is SiT5, 800. Now not
one dollar of this Si75 800 is oarnod by
the labor OF these men 1t is the e-
gal interest on S24 200 These men live
laboriously aud work for moderate COM
pensation. They take only the legal rate
of interest Neither do they enter iuto
any speculation.