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There is a quotation widely attributed to Albert Einstein to the effect that "Compound interest is the most powerful force in the universe". Now, there is disagreement about whether or not he actually said that officially, but the point is that compound interest is indeed a very powerful tool.

Most kids have heard the story of how much the money paid to buy the island of Manhattan would be worth today had it been allowed to accrue interest. I found it and copied it from a website (http://www.stretcher.com/stor ies/05/05jun27d.cfm) It goes like this:

"In the early 1600s, the American Indians sold an island, now called Manhattan in New York, for various beads and trinkets worth about $16. Since Manhattan real estate is now some of the most expensive in the world, it would seem at first glance that the American Indians made a terrible deal. Had the American Indians, however, sold their beads and trinkets, invested their $16 and received 8% compounded annual interest, not only would they have enough money to buy back all of Manhattan, they would still have several hundred million dollars left over. That is the power of compound interest over time."

Now obviously, our modern banking system did not exist in the 1600's, and even if it did, it is unlikely that the natives would have put their beads and trinkets into an 8% interest bearing account.

However, the lesson and the point here are still relevant. Given the power and effectiveness of compound interest, why wouldn't you use that to your advantage? A little bit of money in your 20's will turn in to a LOT of money in your 60's, even after the eroding effect of inflation.

In addition, it's easier than ever to get good rates of return on relatively safe investment vehicles. And excellent example is the 401 (k) account. It's tough to find a much easier way to invest in the equities markets with pretty low risk. Many employers will even match a percentage of your income going into such an account. That means if you don't use the benefit, you're essentially giving away part of your salary! Why leave that money on the table? If your employer wants to give you money, why wouldn't you take it! As an example, a common scheme is to have the employer match your contributions dollar for dollar up to 4% of your income. In other words, if you invest 4% of your in your 401(k), your employer will match that same amount. That's like a 4% raise in salary. Sure you can't access it now, but that's

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