What Einstein did NOT say about compound interest

January 07

One of the things that has long annoyed me about motivational speakers is that many of us do not seem able to do basic research.

In December, I heard a speech in which the speaker basically said that Einstein had claimed that the greatest invention of all time was compound interest.

A quick search of the term ---Einstein compounding--- on Google turned up almost 100,000 pages that reference this quote.

However, the earliest mention of this quote that anyone seems to have been able to find was a 1983 article in the New York Times. The problem was that Einstein had died in 1955 - some 28 years earlier. So it seems most unlikely that the physicist ever uttered those words.

Likewise, something I heard on another course earlier in the year was the claim that we only use 10 per cent of our brains. For various reasons, I have been reading up on Neuroscience recently, and apparantly this claim is one of the hot buttons that really gets them wound up. It has been repeated in adverts since the 1950s, and apparantly all stems from some work done by Dr. Karl Lashley in 1939 that showed that rats could carry out visual discrimination even if over 90 per cent of their thalamocortical pathway was removed.

In fact, removing as little as 1 per cent of a human brain can lead to significant problems.

And this is where I have to make a confession - I made a similar error - and even worse, I made it on a recording:

In the 2004 version of The UK Property Millionaire, I said that research done at Havard in the 1970s had shown that students with written goals ended up accomplishing far more. In fact, the study was (supposedly) at Yale, and not Havard (as I said on the CDs), and ran from 1953-1973.

However, this is where things get more interesting!

Fast Company (the US magazine) approached Robbins Resarch International to ask for documentation on this study... RRI suggested that Tony had got it from Brian Tracey, who referred them to Zig Ziglar. And Zig Ziglar (or his office) said that the source was probably... Tony Robbins!

So they approached Yale directly:

• We are quite confident that the study did not take place.
• We suspect it is a myth

...said Beverly Water of Yale, who carried out extensive research into whether this study ever happened, after it was reported all over the place.

Brian Tracy, in response to this research piece, apparantly said

• Heard this story originally from Zig Ziglar.
• If it is not true it should be.

I have to admit, that while I am kicking myself for having included as if it were a fact this in my CD set, I am pretty much with Brian Tracy on this one.

Goal-setting has proven incredibly valuable to me, and I attribute the fact that I was able to retire at 32 to the fact I’d started setting goals at age 17.

This is just the feature article from the January 07 newsletter. Subscribe for market comment, forthcoming events, and more.

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