The Magic of Compounding

FinanceUploaded 4 months ago

90% of the people who join a gym, leave it in the first 1 week. But why do people leave it? You’ll get the answer in this blog.

😑If I give you two options:

  • Take 1 million dollars
  • Take 1 penny which doubles every day for the next 1 month.

Which one would you take?

Most of the people will take 1 million dollars but why?

Because they don’t know the power of compounding.

🤔What is compounding?

Compounding is the 8th wonder of this world. — Albert Einstein

So, let’s come back to the question I’ve asked from you. Most of you would have taken 1 million dollars but do you know…

If you have taken 1 penny which doubles every day, you would have made much more than that. Don’t Believe me 🤬!

  • First 10 days: 2**10 = 1024
  • First 15 days: 2**15 = 32768
  • First 30 days, 2**30 = 1073741824

(2**2 means 2+2, 2**3 means 2+2+2, etc).

You can also do the calculation in the calculator.

So, what you have found.

🤏Atomic Habits

James Clear the author of Atomic Habits, says that if you get 1% better every day. You end up getting 3700% better in the last of the year.

So, 🤯are you blown away?

😍Story of Magic

Once upon a time, there was a poor man who did great work for a King.

King was very impressed ❤️‍🩹 by his work. So, he called the poor man and asked him what he wanted.

The poor man asked for some rice. But the King was very egotistical (which means he was having much ego), so he agreed to the poor person's request without listening to his manager.

When the manager called the poor man and asked how much rice he wanted.

The poor man said that he only wanted rice equivalent to the boxes in a chessboard. But as the calculator moves from one box to another then he would double it.

Means: First box 1 rice, Second box 2 rice, Third box 4 rice, FourthBox 8 rice.

After calculating till 64th box. The manager was shocked😲. Because the amount was if combined together. It can form a mountain that will be larger than Mount Everest(which is the tallest mountain).

🤔 What does it need for me to achieve compounded results?

You just have to be patient. Otherwise, you will loose it all.

Thanks for reading this blog.