Apparently, Einstein once said…
‘Compound interest is the 8th wonder of the world’ and ‘the greatest mathematical discovery of all time’.
When discovering this, it reminded me of a fable:
George had worked hard all his life, was clever with his investments and amassed a wealthy estate.
His 2 sons (Paul & John and his only children) hoped to inherit his estate when he passed.
During his last days George wanted his sons to understand the power of wisdom before he’d allow them access to his money.
He said to both sons. “Here’s £1 million and 1p. You have a choice. Either take the million, invest it for a month and keep what’s left or take the 1p, which will be doubled each day for a month.”
Paul didn’t hesitate and took the million. Immediately hiring a crack investment team in the quest to make a huge profit. But John, to his brother’s dismay, thought a while and took the 1p.
On day 10 Paul had paid more in wages than his crack team were making in profit, but he was still sure he made the right choice, as John had only amassed £5.12.
By day 20 Paul was beginning to panic, as he was still not profitable, yet John’s pot had increased to over £5,000.
On day 30 Paul’s team had made him £200,000 profit, and he went to see John to gloat.
But to his amazement, John’s amount has swelled to a over £5 million and was set to double on the final day to nearly £11 million.
John had gained the wisdom his father had wished and like Einstein had portrayed, by understanding the power of compound interest.
Compound interest can work in business too.
If you achieved 20% growth on 1 million revenues, every year for 10 years, you’d create a £6 million business.
Imagine, through some new great products, you manage a 50% annual growth over the same period. You’d rocket revenues to a mind blowing £57 million.
Based on these figures, I think we need the help of Einstein in developing some new office technology solutions and electric car charging packages, whilst also working on a new 2021 compound interest sales and marketing plan.
…is it worth considering what’s required in your business to create repeatable growth?
