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Entries in compound interest (1)

Tuesday
Jan312012

Blog Preamble

“Compound Interest is the eighth wonder of the world.”  This quote has been attributed to both Albert Einstein and Ben Franklin, in addition to some of the brightest minds in the development of financial theory.  No one knows who said it first, but who really cares anyway?  The fact of the matter is that neither finance nor investing was the core competency of these brilliant men--Einstein and Franklin--yet both recognized the powers of compounding interest and spent ample time in awe of how something so complex is actually rather simple.

The basic premise of compound interest is that an initial sum of money, growing at a given rate of interest, with the interest invested alongside that initial sum, will grow exponentially over time.  It’s in this exponential phase of growth that the benefits and beauty of compounding are truly realized, yet many never realize this because compound interest requires a combination of time, discipline and patience.  Especially in this day and age, time, discipline and patience are scarce commodities.

With this blog I would like to accomplish several goals, each relating to the compounding of interest.  First and foremost, this is my attempt to compound the interests of my knowledge base.  Much like with money, I think the more solid, diversified background of knowledge a person possesses, the more exponential the trajectory of growth that person’s future body of knowledge will take, given a consistent effort (aka interest rate) over time. 

While investing and economics will be core focal points in this blog, I will spend ample time exploring sports, the outdoors, tech, gadgets, philosophy, politics, books, food and drink, and some of my other pleasures and interests in life.  Along the way, I hope to give myself, and anyone out there reading this blog, a little more “wordly wisdom” as Charlie Munger likes to say.

More specific to investing, I intend to spell out how exactly I attempt to accomplish my objective of compounding interest, while simultaneously tapping into new sources of knowledge in order to expand my personal capacity to strive towards this goal.  I have some ideas in mind for what paths this site will take, including write-ups on interesting investments, opinion and commentary on key events, interviews with influential and/or thoughtful thinkers on important topics, and highlights on some of my role-models in both investing and life.  Beyond that, just about anything is possible and only time will tell where exactly this all will go. 

I am pursuing this blog as an iterative process, and furthermore, a cathartic one.  I learned through the years that writing is an outstanding outlet through which to clearly spell out ones own ideas, to engage with others, and to vent any frustrations through the clarity of patient, objective thought.  In doing so, there will be a certain stream of consciousness, that will over time lead into certain specific narratives.  

I promise that at no point will this blog ever be a “finished product.”  It will and should always remain dynamic and be an ongoing journey of personal development as an investor and an individual.  I both welcome and encourage the active exchange of ideas on this blog and that means expressing disagreement as much as agreement.  I hope you all join me on this endeavor and enjoy the ride along the way.