P521 ORACLE 521 Sat29 Jul C4 2200:10 2/5 There are occasions when inflation begins to fall and subsequently turns into deflation. On these occasions your best bet is to lend it. Lending your money involves deposits with banks and building societies or the purchase of fixed or variable rate interest bearing securities where your return will be primarily in the form of interest rather than capital gains. Given current interest rates coupled with tax changes in the last Budget, high interest bearing investments are a better proposition than ever. contd > Bob Beckman is the editor of Investors Bulletin Units Headlines ITN Latest Your MoneyP521 ORACLE 521 Sat29 Jul C4 2200:11 4/5 R The effect of compound interest on funds invested for relatively protracted periods should fascinate you. At 8.45% compound, the original stake will multiply itself five fold. After 50 years, the value will be 56 times the original sum invested. After 100 years the original stake would be multiplied by 3,813 times and after 200 years the growth in value would be over 10m times. contd... >>>>> City headlines 500 Newsfile 520 Bob Beckman is the editor of Investors Bulletin Next Story Units Your Money DiversionsP521 ORACLE 521 Sat29 Jul C4 2201:00 5/5 Applying the concept of compound interest to our contemporary environment, the sum of £100 per month invested at 15% compound will grow to £27,521 in 10 years, £149,723 in 20 years and £692,321 in 30 years. Unfortunately, there are very few investments that will enable the small investor to achieve compound interest at a constant rate. But, I know of one.....it's called a Zero Coupon Bond. Watch this space for further details. >>>>> City headines 500 Newsfile 520 Bob Beckman is the editor of Investors Bulletin Units Headlines ITN Latest Your MoneyP521 ORACLE 521 Sat29 Jul C4 2200:01 1/5 There are really only three things you can do with your money: you can lend it, spend it, or invest it!!! During a period of gently rising inflation your best course of action is to invest your disposable income in a manner that will protect your savings from a loss of purchasing power. When rampant inflation takes over, you might just as well spend your money as fast as you earn it.There are few forms of investment able to withstand the type of virulent inflation now seen in some lesser developed nations. >>>>> FREE ORACLE PRINTED INDEXES p677 C4 Next Story Units Your Money DiversionsP521 ORACLE 521 Sat29 Jul C4 2200:01 3/5 $/ It has been said that if the Indians who sold Manhattan Island for $24 had put the money in a bank paying interest at 6%, by 1950 it would have been worth more than all the property there. It's all part of the magic of compound interest. Over the past 200 years it has been estimated that interest rates have averaged 8.45% per annum. It would therefore not be unreasonable to assjlf that 8.45% will be the prevailing rate over the next 200 years. contd >>> City headlines 500 Bob Beckman is the editor of Investors Bulletin Units Headlines ITN Latest Your Money