Power of Compounding

If you & your friend were given a choice between taking 10 crores in cash this very instant and a single rupee that doubles in value every day for 31 days, which would you choose? Let’s take a closer look. Let’s say you take the rupee option.

DAY 01 – 1

DAY 02 – 2

DAY 03 – 4

DAY 04 – 8

DAY 05 – 16

DAY 06 – 32

DAY 07 – 64

DAY 08 – 128

DAY 09 – 256

DAY 10 – 512

DAY 11 – 1024

DAY 12 – 2048

DAY 13 – 4096

DAY 14 – 8192

DAY 15 – 16384

DAY 16 – 32768

DAY 17 – 65536

DAY 18 – 131072

DAY 19 – 262144

DAY 20 – 524288

DAY 21 – 1048576

DAY 22 – 2097152

DAY 23 – 4194304

DAY 24 – 8388608

DAY 25 – 16777216

DAY 26 – 33554432

DAY 27 – 67108864

DAY 28 – 134217728

DAY 29 – 268435456

DAY 30 – 536870912

DAY 31 – 1073741824

107,37,41,824 – ONE HUNDRED SEVEN CRORE THIRTY-SEVEN LAKHS FORTY ONE THOUSAND EIGHT HUNDRED TWENTY-FOUR.

On Day Five, you have sixteen rupees. Your friend, however, has 10 crores. On Day Ten, it’s 512 versus your friend’s crores. How do you feeling about your decision?. Your friend having fun with his crores, enjoying the heck out of it, and loving his choice.  After 20 full days, with only 11 days left, the rupee lane has only 5,24,288 Rs.

Power of Compounding

Then the invisible magic of the Compound Effect starts to become visible. The same small mathematical growth improvement each day makes the compounded rupee worth 107,37,41,824 on Day Thirty-one, more than ten times your friend 10 crores. 

In this example, we see why consistency over time is so important. It isn’t until the very last day of this monthlong ultramarathon that you blow out of the water; end up with 107,37,41,824 Rs. Amazingly, the compounding force is equally powerful in every area of your life.

This is best illustrated in Darren Hardy’s “The compounding effect” book. This book may revolutionize your outlook towards work and work ethic.

In the real world, the compounding effect goes by the name ‘overnight success. Very few things are as impressive as the power of compounding”.

Sagar Mathapati

Founder | Chief Investor - at Grand Root Inc |

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