The Marietta journal. [volume] (Marietta, Ga.) 1866-1909, 1886-09-30

HOW WEALTH Is ACCUMULATED.

button Of wealth. They have failed
to acquire a competence, and being
men of intelligence and Industrious
habits, the untOward result of their
toll and painstaking is mystery to
them. But it is no mystery to peo-
pie of close calculation.
Money makes money, but the ma
jority OF people pay no attention to
the mode by which this is brought
about and the practical consequences
which follow. Schoolboys are taught
the rule of compound interest, but
nine out of ten forget all about it for
the remainder of their lives. Yet
this principle has more to do with
the accumulation of large fortunes
than any other cause, and it has
bearings upon the increase of wealth
and the ratio and style of expendi-
ture, both personal and national, of
which the practical character can
not be ovcrrated.
A few days ago we read of the
death of capitalist who left a for
tune of sl5, 100000 He was ninety
years old, and it is pretty evident
that he was man of quiet habits
and moderate expenditures, letting
his capital accumulate from year to
year by its own natural force 1t is
only when it has been in operation
for long series of years that we see
what the force of compound interest
Is. For the first few years the aug
mentation is almost imperceptible,
but when once the power of increase
has been developed it goes on at an
augmenting ratio until results are al
most incredible. There can be no
doubt that in the case we have men
toned the wealth accumulated after
the natural duration Of life had been
reached was far more than in all the
seventy years previous.
If money can be invested at 8 per
cent, and the interest reinvested at
the same rate it will double in five
years. Allow ten years for this to
take place, owing to loss of time for
reinvesting, and we reach the re-
markable conclusion remarkable.
we mean, those who have not thought
about it-that if a man can invest
$4,000 at one and twenty years, and
let it accumulate at compound inter-
est, 1t will amount to tho enormous
sum OF $4,000, if he lives to the
age seventy, to 100000 at eighty
and 5000, 600 at ninety. This is the
secret of the large fortunes of the
great bankers and capitalists, whose
money goes on accommodating from
generation to generation, and aug
ments with prodiglous rapidity after
thirty or forty years have passed.
However, this entire process is
sometimes reversed. A man may
waste or needlessly spend $1,000 by
the time he is one or two-and-twenty.
What is the effect? Ii he lives to
the age OF seventy he will be $50,
600 poorer for it, or it is better to
say he will have lost the chance of
being $4,000 better off than he is.
Few men at this age can look back
upon such loss with complacency.
This general truth is apparent, that
the younger a man is the more val
liable is money to him. We have
seen what S., 600 is worth to a man
OF twenty-one, namely, fortune /;
but the same sum to man of fifty
would he of comparatively small ac-
count. i
Now suppose man begins life with
economical habits, and by rigid self
denial, accumulates $4,000 by the
time he is twenty-five. This sum
will have increased TO q competency
when he desires TO be free from the
cares OF business, and can then, and.
indeed, for years before, have the
pleasure of laying out his money free
ly and without fear in gratifying his
tastes i'll doing good But if he be in
clined to humor his tastes when young
to buy, we will say, expensive fur
niture, or to mingle too freely in So
ciety, so that he never saves at all
until he is five-and-forty--wha good
will $4,000 do him then 1t is, of
course, good in self, but as the foun-
datlon of q competency such sum is
wholly inadequate. Itwould amount
to only $4,000 at sixty-fye, and not
to competency till long after three
score and ten. One dollar at twenty
one is worth Sl20 at ninety, and
every hundred dollars spent in fool
cry and fnery before fve-and-twenty
is simply $4,000 thrown away from
that provision which should be made
for the time when work must be a
burden.
These considerations should be
carefully weighed by young men in
business. They are exposed on en-
tering life to innumerable tempta-
tons to spend money. All such
should be steadily resisted. The
true course for youth is quick saving
and careful economy. The time will