It’s a classic exercise in the value of small numbers compounded over time. (You can find this in a bunch of places, but we got the following graph here.)

Most people would think a million dollars in the hand is better than taking a penny and doubling it every day for a month. But as it turns out, you get waaaaaaay more if you go with the penny:

Below is an example of how fast money can accumulate. Start by putting a penny in a bucket (better use a big bucket). The next day, put two pennies in the bucket. Each day after that, double the amount put in the prior day. At the end of a month, you will have over $10 million.

Day #	$ Saved Today	Total $ Saved
1	0.01	0.01
2	0.02	0.03
3	0.04	0.07
4	0.08	0.15
5	0.16	0.31
6	0.32	0.63
7	0.64	1.27
8	1.28	2.55
9	2.56	5.11
10	5.12	10.23
11	10.24	20.47
12	20.48	40.95
13	40.96	81.91
14	81.92	163.83
15	163.84	327.67
16	327.68	655.35
17	655.36	1,310.71
18	1,310.72	2,621.43
19	2,621.44	5,242.87
20	5,242.88	10,485.75
21	10,485.76	20,971.51
22	20,971.52	41,943.03
23	41,943.04	83,886.07
24	83,886.08	167,772.15
25	167,772.16	335,544.31
26	335,544.32	671,088.63
27	671,088.64	1,342,177.27
28	1,342,177.28	2,684,354.55
29	2,684,354.56	5,368,709.11
30	5,368,709.12	10,737,418.23

 

It still blows our minds every time we see it. For us, it just reinforces how small changes over time add up to really, really BIG results.

What small change could you make today?

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This entry was posted on Tuesday, September 18th, 2007 at 11:49 am and is filed under A-Has in the Ether. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.