The Eighth Wonder of the World Is Compound Interest

Albert Einstein? Napoleon Bonaparte? Baron Rothschild? Paul Samuelson? John D. Rockefeller? Advertising Copy Writer? Apocryphal?

Dear Quote Investigator: Salespeople and advertisers invoke the name of the scientific genius Albert Einstein when they wish to impress gullible individuals. The following grandiose statement has been attributed to Einstein:

Compound interest is the eighth wonder of the world.

Sometimes the remark is credited to financial luminaries such as Baron Rothschild or John D. Rockefeller. Would you please explore this topic?

Quote Investigator: The saying appeared in a section titled “Probably Not By Einstein” in the authoritative volume “The Ultimate Quotable Einstein” from Princeton University Press. 1

The earliest close match located by QI appeared in an advertisement for The Equity Savings & Loan Company published in the “Cleveland Plain Dealer” of Ohio in 1925. No attribution was specified. Boldface added to excerpts by QI: 2

The Eighth Wonder of the World—is compound interest. It does things to money. At the Equity it doubles your money every 14 years, but here is an even greater wonder of it—

Deposit five dollars a week for twenty years, say, and let the interest accumulate. You will have actually put away only $5,200, but you will have $8,876.80. The difference of $3,676.80 is what 5% compound interest has done for you.

QI hypothesizes that the statement was crafted by an unknown advertising copy writer. Over the years it has been reassigned to famous people to make the comment sound more impressive and to encourage individuals to open bank accounts or purchase interest-bearing securities.

Below are additional selected citations in chronological order.

The Quote Investigator has written an article exploring a similar statement: “Compound interest Is man’s greatest invention”. The article is available here.

Advertisements using the label “Eighth Wonder of the World” have a long history. For example, in 1816 a lottery designed to raise money to repair the Grand Sunderland Bridge (Wearmouth Bridge) in England applied the label to the bridge: 3

Every Purchaser is presented with a beautiful Medal or Print of this Eighth Wonder of the World.

In 1853 an advertisement in a Boston, Massachusetts newspaper applied the label to an elixir of dubious value: 4

A Phenomenon in Medicine!
PROFESSOR MORSE’S INVIGORATING ELIXIR, OR CORDIAL.
THE EIGHTH WONDER OF THE BOTANIC WORLD!

In 1883 an article in “Brooklyn Daily Eagle” of New York heralded the opening of the Brooklyn Bridge: 5

The Eighth Wonder of the World—eighth in point of time, but first in point of significance was today dedicated to the use of the People. Amid the booming of cannon, the shrill whistling of a thousand steamers and the plaudits of great masses of citizens the Brooklyn Bridge . . .

In 1911 an advertisement for a Big Wagon Show applied the label to a Shetland pony named Cupid who performed various tricks: 6

The Educated Shetland Pony, or the Pony With the Human Brain. Little Cupid is the Eighth Wonder of the World. He does more work in less time, with more ease and grace than any other living pony. He will add; subtract, multiply, spell words, pick out colors.

In 1916 an advertisement for Security Investment Company published in a Riverside, California newspaper proclaimed that compound interest was the greatest invention: 7

“Gentlemen, if the man who invented compound interest had of secured a patent on his idea he would have had without any doubt the greatest invention the world has ever produced.

In 1925 the expression under analysis appeared in an advertisement in the “Cleveland Plain Dealer” as mentioned previously:

The Eighth Wonder of the World—is compound interest.

In 1929 an advertisement claimed that Napoleon Bonaparte was astounded by compound interest although he did not label it the eighth wonder: 8

When Napoleon had the marvels of compound interest explained to him, he exclaimed: “I wonder it has not swallowed the world.” Compound interest, or “interest compounded semi-annually,” is indeed a remarkable thing.

In 1965 “The Wall Street Journal” printed an advertisement for the Community Savings and Loan Association of Compton, California which attributed the saying to Baron Rothschild. There have been multiple Barons, so the name is ambiguous. The 1st Baron was a prominent banker named Nathan Rothschild who died in 1915: 9

Do You Know What Baron Rothschild Considered The Eighth Wonder Of The World?

COMPOUND INTEREST. Rothschild, one of the world’s richest bankers, was asked at a dinner party if he could name the Seven Wonders of the World. He said: “No, but I can tell you what the Eighth Wonder is. The Eighth Wonder should be utilized by all of us to accomplish what we want. It is compound interest.

In 1967 the M.I.T. economist Paul Samuelson penned a column that included the saying: 10

Social security is squarely based on what has been called the eighth wonder of the world—compound interest. A growing nation is the greatest Ponzi game ever contrived. And that is a fact, not a paradox.

In 1981 a guest columnist in a Manitowoc, Wisconsin newspaper credited the saying to “Old Grandpa Rockerfeller”. The description corresponded to business magnate John D. Rockefeller although the odd spelling might be an allusion to an old person’s “rocker”: 11

Old Grandpa Rockerfeller the multi-millionaire who preached thrift said something I never forgot. He said, “The 8th wonder of the world is compound interest.” Unfortunately very few people understand the magic of compound interest.

In 1988 a financial analyst ascribed the saying to physicist Albert Einstein: 12

A. Michael Lipper, president of Lipper Analytical Securities Corp., quotes Albert Einstein’s remark that “The eighth wonder of the world is compound interest.” If you can invest at a sure 7 percent return, your money will double in 10 years. If you are patient, and stick with your investments over time, you will almost always come out ahead.

In conclusion, this article presents a snapshot of current research. The label “eight wonder” was applied to compound interest in an advertisement for a bank in 1925. No attribution was provided, and anonymous advertising copy writers have applied the “eight wonder” label to a wide variety of objects and ideas for more than two hundred years. QI has found no substantive evidence that Albert Einstein, Baron Rothschild, or John D. Rockefeller employed the saying.

Image Notes: Illustration of stacks of coins growing in height from PublicDomainPictures at Pixabay. Image has been resized.

(Great thanks to Jason Zweig whose inquiry led QI to formulate this question and perform this exploration. Thanks also to researchers Barry Popik and Fred R. Shapiro. Popik found a match for the saying in 1965.)

Notes:

  1. 2010, The Ultimate Quotable Einstein, Edited by Alice Calaprice, Section: Probably Not By Einstein, Quote Page 481, Princeton University Press, Princeton, New Jersey. (Verified on paper)
  2. 1925 April 27, Cleveland Plain Dealer, (Advertisement for The Equity Savings & Loan Co., 5701 Euclid Ave.) Quote Page 26, Column 6, Cleveland, Ohio. (GenealogyBank)
  3. 1816 October 26, The Leeds Mercury, (Advertisement for the Sunderland Bridge Lottery), Quote Page 2, Column 1, Leeds, West Yorkshire, England. (Newspapers_com)
  4. 1853 March 29, The Boston Atlas, (Advertisement for Dr. Morse’s Invigorating Cordial), Quote Page 4, Column 2, Boston, Massachusetts. (GenealogyBank)
  5. 1883 May 24, The Brooklyn Daily Eagle, GLORIFICATION! The Two Cities Celebrate the Work that Makes Them One, Quote Page 12, Column 1, Brooklyn, New York. (Newspapers_com)
  6. 1911 September 28, Crawford Mirror, (Advertisement for “Lucky Bill’s” Big Wagon Shows), Quote Page 5, Column 1, Steelville, Missouri. (Newspapers_com)
  7. 1916 June 28, Riverside Daily Press, Advertisement titled “The Greatest Invention” for “Security Investment Co.”, Quote Page 5, Column 3, Riverside, California. (GenealogyBank)
  8. 1929 December 8, The Courier-Journal, Do You Know What 8 Per Cent Compound Interest Means? (Advertisement for Century Building and Loan Association, Dallas, Texas), Quote Page 10, Column 7, Louisville, Kentucky. (Newspapers_com)
  9. 1965 October 5, Wall Street Journal, (Advertisement for Community Savings and Loan Association, Compton, California), Quote Page 18, Column 3, New York. (ProQuest)
  10. 1973 The Samuelson Sampler by Paul Samuelson (Paul Anthony Samuelson), Chapter 8: Some Reflections on Equity, Column Title: Social Security, Date: February 1967, Start Page 146, Quote Page 148, Thomas Horton and Company, Glen Ridge, New Jersey. (Verified with scans)
  11. 1981 October 14, Herald-Times-Reporter, Guest Editor: Financial security requires good planning by Robert Lindwall, Quote Page 4, Column 2, Manitowoc, Wisconsin. (Newspapers_com)
  12. 1988 November 26, Courier-Post, Personal Finance: Investors know little about mutual funds by Grace Weinstein, Quote Page 8C, Column 1, Camden, New Jersey. (Newspapers_com)