The Cambria freeman. [volume] (Ebensburg, Pa.) 1867-1938, 1874-03-06
The Lac of accumulation.

Every body knows that money make
money, but It is not everybody tbs
pays attention to the ntOdus oUcrnaG
by which this is brought about anl
the practical consequences which fol
low
SchOolbovs are taught the rule o
compound interest, but nine out of t.,
of them forget all about it for the IT.
mainder of their lives. Yet this prin.
ciple has more to do with the accurn-
uation Of large fortunes than anv
other cause whatever; and it. has bear.
inGs on the increase Of wealth and on
the ratio and style Of expenditure
both personal and national, of which
the practical character cannot be over
rated.
We read in paper a few morths
ago Of the death Of an eminent Lon
don capitalist who left the enormous
fortune Of three millions sterling
This old gentleman was over ninctv
years Of age at the time OF his death,
and it is pretty evident that he was
man Of quiet habits and moderate ex-
penditure, letting his capital accumu-
late fl IN year to year hy its own n.
ural force. Now, it is only when 1t
has Ieon III operation for along series
Of cOnsccut' ears that we see what
the force OF compound interest is
For the first few years the augmenta-
tiOn is almost impcrceptihlc, hut when
o ce the power Of inc case as been
developed, 1t 90 = on at al augmenting
T. til, until the re~llts arc almost in
credible. There can be no doubt that
in the case just mentioned, the wealth
accumulated after the natural dura-
tion of life had been reached was far
more than al the seventy years pre-
viJu3.
If money can be invested at eight
per C mt. md the interest rrinvcstCd at
the same rate, it will double itself in
five years. Allow ten years for this
TO take place, owing to loss of time in ,
reinvesting and we reach the remark /
able cOnclu 'ion--remlrka Bile. we mean /
to those who have never yet thought .
about it-that If a man can Law by
thousand dollars at one and twenty.
and let it accumulate at cOmround in
ttr1st, it will amount TO the enormous
sum of thirty thousand dollars. if he
lives to the age of seventy. t, sixty
Thousand at eighty, and to a hundred
and twenty thousand at ninety. This
IS the secret of the large fortunes of
the great bankers and capitalists of
Europe, whose money goes on accnmu-
Iating rom generation, to generation.
and augments with prodigious rapidly
after thirty or fifty years have passed
on.
The process, however, may be re-
versed. A man wastes or spends q :
thousand dollars needlessly by the
time he Is one or two and twenty
What is the effect If he lives till he
3 seventy he will be thirty thousand
toIIars poorer for it; or, we will sav.
he will have lost the chance of being
thirty thousand dollars better off than
nc IS.
we then arrive at the general truth, !
hat the younger man is the more :
ialuble money is to him We have
'een what a thousand dollars is tOa man
II twcnty-one, viz: the making of
ortune; but Il thousand dollars to 4 ,
nan of fifty would be Of comparatively
mall account. ,
Suppose man Eegins life with eco F
omical habits, and by rigid self-denial h
ccumulates five hundred pounds bv the
line he is twenty-five. That sum will
mount 80 acompetency by the time he s
.cslresto be free from the cares of busi- r
esS, and he can then, and indeed for !
ears before, have the pleasure of Law I
lg out his money freely and without K
ear, in gratifying his taste or in doing II
,OOd.
But If he is inclined to CRAFTY his n
aSteS when young, to buy. we will c;
ay expensive furniture, or to mingle
feely IN society, so that he never saves
t all until he is five and forty. what
ood will five hundred pounds do him
hen 1t is, of course, good in itself y
ut rs the foundation of a competency
Is utterly Inadequate. 1t would only =
mount to two thousand pounds at
IXty-hve, and not to a competency i
II long after three score and ten.
Inc points of the whole matter are
lcrefOre this: Every dollar saved in a
outh is thirty dollars in old age :
very hundred dollars spent in foolery
| hhery before five and twenty is sim n
~ three thousand dollars thrown away n
I provision for the time when work u
aust be a burden.
Let our young men in business think "
this. They are exposed, on enter
lg life, to innumerable temptations
spend. Let such be steady resist~
|. The course in youth is quick saw :
e and careful economy. BY and bv :
Uthe VIII come when this will bear Z.
5 legitimate fruits. Then is the time =
II open handed freedom in expendl- 4.
ire, when the judgment is matured :,
hen the knowledge of the world is
and when capital has been =
ecumulated to such an extent that y
en- 1t there is no more saving. there
eed be no further anXiety-M 4