The Somerset herald. [volume] (Somerset, Pa.) 1870-1936, 1874-03-11
rnc law Of Accommodation.
Everybody knows that mon

Everybody knows that money
makes money, but it is not
everybody that pays attention to the
modus operandi by which this is
brought about and the practical con-
sequences which follow.
Schoolboys are taught the rule
Of compound interes, but nine out of
ten of them forget all about it for the
remainder of their lives. Yet this
principal has more to do with the
accumulation of large fortunes than
any other cause whatever and it has
bearings on the ratio style Of expen-
diture, both personal and natural, of
which the practical character cannot
be overratcd.
We read in paper few months
ago of the death of an eminent Lon
don capitalist, who left the enormous
fortune of three millions sterling
This old gentleman was over ninety
years of age at his death and it is
pretty evident that be was man OF
quiet habits and moderate expendi-
ture, letting bis capital accumulate
from year to year by its own natural
force. Now, it is only when it has
been in operation for long series Of
consecutive years that We see what
the force of compound interest is.
For the first few years the augmenta-
tion is almost imperceptible, but when
once the power of increase has be-
come developedait goes on at an aug
menting ratio until the results are
almost incredible. There can be no
doubt that in the case just mentioned
the wealth accumulated after the nat
ural duration of life had been reached
was far more than all the seventy
years previous.
If money can be invested at eight
per cent, and the interest reinvested
at the same rate, it will donble itself
in FIVE years. Allow ten years for
this to take place, owing to loss OF
time and reinvesting, and we reach
the remarkable conclusion-remarka-
BILE, we mean, to those who have not
thought about it-that if a man can
! lay by thousand dollars at one and
twenty, and it accumulate at
compound interest it will amount to
the enormous sum of thirty thousand
dollars if he lives to the age of seuenty
to sixty thousand at eighty, and to a
hundred and twenty thousand al
ninety This is the secret of the
large fortunes of the great bankers
and capitalists of Europe, whose
money goes on accumulating fol-
generations, augments with prodig'
ious rapidity after thirty or fifty years
have passed on.
The process, however, may be re-
versed. A man wastes or spends a
thousand dollars needlessly by the
time he is two and twenty. w ha,
is the effect? If he lives till seventy
he will be thirty thousand dollars
poorer for it; or we will say, he will
have lost the chance of being thirty
thousand dollars better off than he is.
We then arrive at the general
truth, that the younger a man is the
more valuable money is to him. We
have seen what thousand dollars
is to o man of twenty-one, Wis: the
making of a fortune; but thousand
dollars to man of fifty would be Of
comparatively small amount
Suppose a man begins life with
economical habits, and by rigid self
denial accumulates five hundred
pounds by the time he is twenty five.
That sum will amount to a eompe-
teney by the time be desires to be
free from the cares of business, and
be can then(and indeed for years be-
fore)have the pleasure of laying out
his money freely, and without fear
in gratifying his tastes or in doing
good.
But if heis inclined to crafty his
tastes when young, to buy, we will
say, expensive furniture, or to min
gle freely in society, 50 that be never
saved at all until be is FIVE and forty
what good will FIVE hundred pounds
do him then! 1t is of course, good in
itself, but as the foundation OF a CON-
potency it is utterly inadequate. 1t
would only amount TO two thousand
pounds at sixty-fve, and not to COM
potency till long after three score and
ten.
The points of the whole matter are
therefore this: Every dollar saved
in youth is worth thirty dollars at
old age; every hundred dollars spent
in foolery or fnery before Fl We and
twenty is simply three thousand dol
lars thrown away Of provision for the
time when work must be a burden.
Let cur young men in business
think of this. They are exposed on
entering life, to innumerable tempta-
tions TO spend. Let such be steadily re-
sisted. The true course in youth is
quick saving and careful economy.
By and by time will come when
this will bear its legitimate fruits.
Then is the time for open-handed
freedom in expenditure, whenIthe judg-
ment is matured when the knowledge
of the world is acquired, and when
capital has been accumulated to such
an extent that even ifthere is 70 more
saving, there need be no further anx-
iety.-Merchant's Manufacturers and
Reuiew.
HintrAbout work for the Month.