How Powerful Is Compound Interest?
By Pat Regnier

(MONEY Magazine) – You may have heard that Albert Einstein called compound interest "the most powerful force in the universe." The line pops up in George W. Bush's Social Security reform proposal, in think-tank position papers and in brochures for network marketing schemes. Some stockbrokers repeat the quotation like a mantra. But did the father of relativity--a man who once said that "money only appeals to selfishness"--really give two neutrinos about compound interest? We wondered.

When we asked Bush campaign staffers where the Einstein quote came from, they could give us only secondhand sources. So we went to a higher authority: Alice Calaprice, administrator of the Einstein Translation Project at Princeton University Press. No luck. "As far as I know, that was made up by someone," Calaprice says. "I haven't been able to find it anywhere." But Calaprice can guess where the attribution comes from: wishful thinking. "Anything you want to give credibility to, just put Albert Einstein's name to it," she says.

Still, it's tough to prove a negative. For all we know, Einstein could have whittled away his spare time giving financial advice to Niels Bohr. So the first person who e-mails pat_regnier with a definitive, verifiable source for the quotation gets a free copy, courtesy of this writer, of Calaprice's book, The Expanded Quotable Einstein.