What a Penny Teaches Us About Success
Suppose a magic genie gives you a choice that you have to make within 5 seconds: $3 million dollars in cash or a penny that will earn compound interest for 31 straight days.
Which would you take?
Most would choose the $3 million dollars. Unless you have an inherent understanding of the power of compounding interest (or you’ve heard this story before), it would seem that a penny, even one that compounds in interest, couldn’t do much in 31 short days
And, initially you’d be right.
Suppose you take the penny and I take the $3 million dollars in cash. At the end of the first week, I’d have $3 million dollars (okay, maybe a little less because of the new car I bought) and you’d have $.64.
The end of week two would find you with $81.92, not bad for what was just a penny 14 days ago, but still not enough to even get a tune up on your old car.
The end of week three, things get interesting. Between day 20 and 21, your penny’s current value nearly doubles going from $5,242.88 to $10,485.76–pretty impressive, but still not enough for a new car.
Then we get to day 29. Day 29 finds your penny at $2,684,354.56. You’ve almost caught me. Then day 30 gets you to $5,368,709.12 and finally, on day 31 you hit $10,737,418.24. A grand total that is more than three times that initial $3 million windfall I received.
This is what Darren Hardy calls the Compound Effect. And it is a great illustration of how our efforts in the gym and with our athletes affect our results.
While starting out with talent (or $3 million dollars) gives us an enormous head start, investing a small amount and giving steady effort starts small but has a big payoff in the end.
Keep working, keep paying attention to the small stuff.