Assume I gave your friend $3 million, and I asked you to save a penny for a month, with it slowly doubling each day. Which would you pick?
If you’ve come across this gambit before, you know picking the penny is the right option. Yet, why is it, in reality, a decision like this would be so hard to make? On day ten, you have $5.12 while your friend is still in the millions. Day 20, you’re still stuck with $5,243.
The real magic happens on day 29. You have 3million dollars, and your friend may have spent half his cash. Day 30, you have $10,737,414.24
This is the magic of the compound effect.
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