On the London tube over the last few days, I noticed many ads for an investment firm called Nutmeg. One of those firms which you give loads of money to towards your pension or savings in general, and hope against hope that they don’t go belly up and have all that money disappear on you. Or maybe the investment will work out, and they invest your money in REITs and leech money from people who need a place to live.
What struck me about one of the ads (I neglected to take a picture, and couldn’t find the image online) was that it had attributed a quote to Einstein about compound interest being the ‘most powerful force in the universe’. Now, my skepticism kicked in immediately. While Einstein was known for many things, finance was not an area he was particularly involved in. I suppose he was too busy trying to figure out how the universe worked to have time for advising people on get-rich-quick schemes. I can’t imagine him pushing General Relativity to the side in order to pore over his investment portfolio.
There are so many quotes misattributed to Einstein. My theory is that people want to sound clever so tag his name onto an idea they are trying to sell. These same clever people probably struggle to name anybody else renowned for intellectual heft, so always go for Einstein. I would also suggest that these same people would have trouble explaining why he was so influential. They simply think that adding his name to something give it more gravitas. And since people are stupid, this probably does have a lot of success. In reality, most of these soundbites bandied around are completely fabricated, or were actually said by someone else. Even when searching for the image above, I noticed a prominent quote appearing on one image of our dear Albert, the very well-known “If you can’t explain it simply, you don’t understand it well enough.” While this quote, or a close paraphrase of it, does exist, it actually came from another Physics Nobel Laureat, the incomparable Richard Feynman. And the quote does make more sense coming from him, as he was as famed for his teaching as much as for his research. But, most people, sadly, haven’t heard of Feynman, so the line morphed into one of the false Einstein-quotes.
As for the line about compound interest? It first appeared in the 1980s, though Einstein passed away in 1955. It has been used in pitches by finance companies since. Though there is no evidence that the great man himself ever said such a thing. Don’t let that stop charlatans using it to con people out of their life savings however.