ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

The wonderful miracles of saving and compounding of money!

Updated on December 26, 2016

Ever wondered why rich people silently became rich? And why people like us keep on wondering how?

There are two things needed these days first, for rich people to find out how poor people live; and second for poor people to find out how rich people work.

- John Foster

So how do the rich become rich?

Many would think gifted talents, birth or marriage in rich families or just by luck. But to become rich is one thing and to maintain the "rich status" is another. Improper financial management can turn princess into paupers in no time.

So the secret of "rich getting richer?"

What people like you and me fail to understand is that rich people have consistently worked on the plan called "compounding of money".

If you want to get rich, just find someone making lots of money and do what he's doing.

- J.Paul Getty

Regarding compounding of money, I would like to tell you a story about 88 year old washer woman named Osleola Mccarty.

Oseola Mccarty has lived a tough life that's for sure. At age eight she was forced to drop out of second grade to help her mother wash and iron the neighbour's clothes. She charged $1.50 to $2 a bundle until the end of World war 2. After the war she increased her price to $10 per bundle. She never managed to earn more than $9000 a year.

Oseola was 40 years old when she finally was able to start saving money. She put her savings in a local bank and never touched it. Overtime, her savings added up, and the principle and interest on those savings kept building and building.

In the summer of 1995, Oseola Mccarty - who never made more than $9,000 a year - donated $150,000 to the university of Southern Missippi.

In Oseola's own words "The secret to building a fortune is compounding interest."

This is the power of saving and compounding of money. No wonder, Albert Einstein called compounding "the 8th wonder of the world."

So ultimately what is compounding? Webster's defines compound interest as the interest paid on both the principle and the accumulated unpaid interest." the key word in the definition is "accumulated". If the principle or interest is spent instead of reinvesting, the power of compounding is diminished. Compounding can be be of time as well as money. Afterall time is more valuable than money.

So compounding of time or money is when money works for you to save you time for doing what you want.

In today's world there are two ways of compounding your money or time:

  1. Network marketing:- It is a substitue for franchising. You don;t need huge amount of money to start but few hundred dollars is enough to get started. It is compounding of both time and money which I love. It is the most rapid way to get rich with very minimum investment.
  2. Investing in ULIP:- ULIP is unit linked insurance policy. Where the money is invested in stock market as done by mutual funds and also you get insured for life. The best part is you can withdraw the whole or partial sum after stipulated lock in period.

Of course the best would be the combination of network marketing and ULIP. This the true way of getting wealthy! :-)


Comments

    0 of 8192 characters used
    Post Comment

    • Cleanclover profile imageAUTHOR

      Cleanclover 

      10 years ago from Piece of land!

      ThaNk you Ksha16

    • ksha16 profile image

      ksha16 

      10 years ago from In

      Great hub on savings. I will definitely save now!

    • Cleanclover profile imageAUTHOR

      Cleanclover 

      10 years ago from Piece of land!

      Thank you Violetsun. Happy to know you liked my hub. Yes hub on ULIP coming soon.

    • Cleanclover profile imageAUTHOR

      Cleanclover 

      10 years ago from Piece of land!

      Thank you White3085 for appreciating! Yes great for self employment and getting rid of those bosses!

    • VioletSun profile image

      VioletSun 

      10 years ago from Oregon/ Name: Marie

      Encouraging reminder about investing; I am looking forward to your hub on ULIP investing so have become your fan. :)

    • white3085 profile image

      white3085 

      10 years ago from US

      Useful information for poor people. Great!

    • Cleanclover profile imageAUTHOR

      Cleanclover 

      10 years ago from Piece of land!

      Sure Prems4u I'll write a hub on Ulip soon. Hope you would like it and also would want one. Thank you!

    • prems4u profile image

      prems4u 

      10 years ago from KERALA Cochin

      Nice work...can u explain Investing in ULIP in detail in next hub?

    • Cleanclover profile imageAUTHOR

      Cleanclover 

      10 years ago from Piece of land!

      I am glad you liked it Mr marmalade! Looking forward for some great maney making hubs from you! You are most welcome :-)

    • MrMarmalade profile image

      MrMarmalade 

      10 years ago from Sydney

      Great story on wealth building

      Thank you

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)