#CompoundInterest

My dad and I were talking about investment given its almost year end and I need to show investment proofs. As usual, I didn't do a great job at it this year. And as usual, my dad had a few things to tell me.

Of the many things he said, what stayed on my mind is (in his words):

"You kids want instant success. You don't realise the long term value of consistent growth".

What he meant was the power of compound interest!

Well, I had nothing much to say so I started using my phone and looked at investment options. I opened a compund interest calculator and started playing with numbers.

Below is a sample calculation:

Initial daily investment: ₹60

Interest rate: 1% daily

Daily reinvest: 100%

Years of investment: 25 years

Final investment value:

₹172,430,965,389,999,938,894,283,451,738,217,737,355,264.00

So basically, if I invest 60 Rupees daily with an interest rate of 1% and reinvest the full amount daily for the next 25 years then at the end of 25 years the investment value would be that BIG number you see above.

And what struck me is the same can happen with Time as well.

Imagine the output when you put 60 minutes of your time daily into one growth habit with 1% progress for the next 25 years with you getting better daily.

We just can't comprehend the output. That's the power of compounding!

That's the power of deliberate practice!

Few things I learnt:

1. Learning comes anywhere, anytime from anyone.

2. Lessons learnt can be cross leveraged.

3. There is value to small but consistent progress.

4. A big goal is achieved taking small steps.

5. Opportunity cost - 60 minutes wasted everyday can have its effects similar to 60 Rs wasted on unnecessary things.

Start. Small. Consistent. Continue. Grow. Big.

PS: my calculation can be wrong so don't write back correcting it. The corrected number will also be much bigger than what you started with. 😀

PPS: like, comment, share and subscribe for good karma.