When I first heard about turning $0.01 into over $10 million in just one month, I thought it was crazy. My head was spinning just trying to figure it out. The math didn’t work in my head. Now, I heard about this trick a long time ago, but never talked about it on this site. I’ve spoken about compound interest before, which is why investing and saving is so worth while. It’s really the only way I will be able to retire. It’s the only way for most people. Compound interest is helping me retire people!
It wasn’t until I actually put this little math conundrum down on paper (OK, it was Excel) that I truly see how it works. Here is the background. If you could double $0.01 every day for one month, what would you get? You’re probably thinking just like me and saying “not much!” It’s hard to comprehend this little equation. I noticed another site some time ago ask if you would rather take $1,000 each day for one month or double $0.01 everyday for one month. Most people would take the $1,000 per day!
I just upped the money to $1 million to make it even more enticing. More people would take that $1 million and run with it. It’s just too tempting and it’s an amount most people couldn’t fathom having in their possession. A few years ago, I would’ve done the same thing.
Want to guess what you would have if you double $0.01 everyday for one month? Let me break it down…
Do you see that up there? Yes, $10.7 million when you take $0.01 and double it everyday for a month. Wow, that’s the real power of compounding interest.
This little math lesson isn’t to get your hopes up, it’s to get you to understand that holding money for a long period of time can reap great rewards. Too many of us are focused on instant gratification, but if you’ve never talked to a lottery winner, then you’d might not know that it usually ends in failure.