Financial compounding is sometimes considered a wonder of the world. However, you can see compounding in nature too, if you look for it.
Let’s first review the common example of a penny doubled every day for 30 days. Would you rather be patient for 30 days or have $1m today?
Being patient pays off. After 30 days of doubling, that humble penny will be worth over $5m!! This is why consistent and frequent saving and investing is important for financial freedom. In the longer run, the difference can be very large.
We see compounding effects elsewhere too. Global population growth has shown strong growth over the last 100 years. It took thousand of years to reach the first billion people on Earth (1804). The second billion took 123 years. The third billion was only 33 years after that. You get the picture.
You also see this in animals, rodents, bugs, birds etc. And think how a chicken can produce one egg per day. Get a rooster involved and you can soon have dozens of chickens laying eggs and producing more chickens And more eggs to eat. Now some people aren’t so patient and want to eat the chicken for meat on day one. And then struggle or starve after that.
Think ahead, be patient and let nature take its course. When you see compounding in nature, use it to your benefit.
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