snopes.com states “Status: Undetermined”
.-= Investor Junkie on: How Much is 1% Costing You? =-.

A good reminder to check out Bond Vigilantes more in 2010 though… I think this will be an interesting year for bonds (and for what it’s worth (not much!) I agree more with Pimco that UK gilts are over-valued, even after the declines we’ve already seen since I began opining this in late 2008).

That said, I still like the quote!

If anything it was probably a tonque-in-cheek kind of quote… Perhaps something like:
Interviewer: Albert, what is the most powerful force in the universe?
Einstein: compound interest (then laughs probably followed)…

So, I’m sure it was taking out of context, but still Einstein surely respected the invention and principals of compound interest..

Sorry if I’m getting a bit nit picky here… but I just want to get the facts straight. I hate it when things are taken out of context and used as absolute fact… After all, do we really think that Einstein really though that “compound interest” was really the strongest force in the universe?

I’ll get off of my soapbox nowm Sorry if I expanded too much on this piece… I really did like Investor Junkie’s post… but that particular quote did make me cringe a bit.
.-= Money Reasons on: MoneyReasons Weekly Cache – 2010, Jan 31 =-.

Long story short – if we assume computer power keeps doubling as rapidly as it has, we can assume we will eventually be able to simulate worlds, physics, universes, and universes containing computers simulating universes. At this point it becomes statistically unlikely you’re *not* living in a simulation!

Welcome to The Matrix.

For the time this one-time tax applies, it is therefore incredibly expensive for a bank to pay a big bonus, which was the whole point – it was meant to encourage them not to pay bonuses, and instead to repair their capital ratios. But bankers are to money what kids with a big straw are to a milkshake: Slurp! Slurp! So they’re paying them anyway, and it’s shareholders and perhaps customers that will suffer.

Incidentally, I read in The Sunday Times that even the former Chief Economist of the IMF agrees with me about bankers, saying: “They think they are worth the money. They are not.” (He is blogging at http://baselinescenario.com/).

As ever, I’m not saying bankers don’t work hard, doing a difficult job that deserves a relatively high salary. I’m saying they’re not entitled to the billions they appropriate on top.

Do you know if the 50% tax on bonuses your gov’t implemented is on top of normal taxes i.e. $50,000 is taxed at 30% normally, so the remaining $35,000 is taxed AGAIN at 50%, or is the 50% tax just a 50% tax now on $50,000….. so the marginal increase is 15% in this example?

thnx
.-= Financial Samurai on: The Katana: Rough Waters On The Horizon =-.

One of the slight problems with human thinking is we tend to think in linear terms so we can understand simple growth rates , yet exponential growth rates seem unbelievable .. though they are just as real

If computing power continues doubling as it currently is , it will be a billion times more powerful in 25 years , this goes way beyond compounding rates .. though you have to wander with exponentials if they will eventually hit brick walls until another paradigm moves it forward again

@RIT , nearly up with you there investing 50% , paid my 3 bed council house off years ago so rent free now

@ermine – True, unless you’re in debt (or in a house with a mortgage!) Sadly, I’m not.

@Investor Junkie – Agreed, they should teach compound interest to those who’d like to learn in special classes in school, when you’ve enough decades left to smooth the returns.

@RIT – Yes, we do sound similar. I have to say I’m having second thoughts about some aspects about the way I’ve gone about life so far, though, re: the balance between earnings, saving and spending. I’m going to post on this on Monday, if I’m not too tied up doing the earning.

@Adam – Good luck with the new blog!