Cartoon Source: Tony Watson
There's one often-cited example of the power of compound interest. If Christopher Columbus had placed a single penny in a 6 percent interest-bearing account and instructed someone to remove the interest every year, the value of the interest earned by 2005 would be almost 31 cents. But if he had placed the same penny into the same interest-bearing account but left the earned interest to compound -- earning interest upon the interest -- the resulting balance for 513 years would be $95,919,936,112. That's $95 billion!
Most of us can crunch the numbers and calculate financial scenarios. But only a few among us have a feel for these numbers in the back of the head, 24/7. I used to travel via STL pretty much on weekly basis, for couple of years. During that time, I had an opportunity of watching the rapid growth of an Indian food place (near the airport) started by a Gujarati gentleman, who freshly arrived from South Africa; from a narrow joint with a few benches, to a spacious full-size restaurant. PIOs own about 50% of the hotels/motels in the US! I guess 90% of these folks came from Gujarat. I find some genetic traits amazing.
No comments:
Post a Comment