Back in the seventh grade, I remember a finance guy come into my math class. He asked, “Would you rather a million dollars right now, or a penny doubled everyday for a month?” Naturally, we all wanted a million bucks. While this will not be a full blog post, I wanted to reinforce the power of compounding interest.
The long term value of a penny or two stashed away today is exponentially greater than getting a lump sum today. We place a high value on the value of money but we do not always take active strategies to make sure we are building wealth. Strategically finding tips for saving that work for your lifestyle will increase your likelihood of being financially independent.
The value of money today being invested today is crazy huge. It is true that a penny saved is a penny earned. Use the below breakdown as a reminder of the importance of investing.
A Penny Doubled Everyday for a Month
Day 1: $.01
Day 2: $.02
Day 3: $.04
Day 4: $.08
Day 5: $.16
Day 6: $.32
Day 7: $.64
Day 8: $1.28
Day 9: $2.56
Day 10: $5.12
Day 11: $10.24
Day 12: $20.48
Day 13: $40.96
Day 14: $81.92
Day 15: $163.84
Day 16: $327.68
Day 17: $655.36
Day 18: $1,310.72
Day 19: $2,621.44
Day 20: $5,242.88
Day 21: $10,485.76
Day 22: $20,971.52
Day 23: $41,943.04
Day 24: $83,886.08
Day 25: $167,772.16
Day 26: $335,544.32
Day 27: $671,088.64
Day 28: $1,342,177.28
Day 29: $2,684,354.56
Day 30: $5,368,709.12
Now, after seeing that math, how would you answer the question my seventh grade guest speaker asked? I think we would all want that a penny doubled everyday for a month. Never underestimate the power of investing strategically.