Eight Wonder of the World

 

 Eight Wonder of the 

 World

I will be discussing the eighth wonder of the world, and that is the compounding effect. I have discussed it in the past.

       I will tell you a story. There was a pries who excelled in reciting poems and impressed anyone who heard them. He had a talent to recite beautiful poems. One day, he didn't have anything to eat and his wife says that do whatever you can, but get money and food in our house. He goes to the king and tells him he recites poems well.

 He tells the king that if he listens to him once, he will be impressed and will reward him well. So king gives him the permission to recite. He starts reciting his poems, impressing the king and his subjects. King asks him what he wants as his reward. 

He says that in the board, he wants one gold coin on the first square and as the squares increase, just double the gold coins from what they were on the square before. The king says he could have asked for anything, why such a small request? He says he is a poor man and that is all he wishes for. 

King rewards him like he asked. So no the first square he gets one coin, on second he gets 2, on the third he gets four and by the time they reach tenth square, the number reaches 512 and by twentieth square the number reaches up to 5,24288! A chess board has 64 boxes. The king is shocked and doubts his decision. By the 32 square, the number swells up to over INR 214 crores! King's treasury empty by now. 

He approaches the man and says with folded hands that was all he had to give and he is left with nothing more. The priest knew about about the law of compounding effect and he took positive advantage of it. 

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You need to use it effectively. Always find new ways of investing. Let's say you save  INR 10,000 and invest it . You get yearly interest of 20% and in one year your INR 10,000 gets you INR 2000 extra . Similarly, by the end of third year, your money value will be INR 17280. So the earning that you get from your multiple investments is called compounding effect.

According to Albert Einstein, it is more powerful than E= MC2. You want to increase your wealth and take the help of compounding effect in order to get a larger return.

  

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