What is compounding? It is the multiplication or doubling of value every once turn.
l. So there was a story about a chess player who was so good that the king asked him what he reward he wants. He said that all the king has to do is double the number (compound) the number of grains for every square of the chessboard. The chess player ended owning warehouses upon warehouses of grains.,
2. How many pieces of paper would you have if you folded it 52 times? (You know that it only physically feasible to fold a paper, no matter how large 7 times). Maybe you cant figure that out.
You experience compounding if you do not pay your credit card bills on deferred payment on time. You sink deep into the debt sinkhole because the amount of indebtedness has doubled in such a short time.
So Warren Buffet used this powe of compounding to the hilt in his wealth building journey at Berkshsire Hathaway.
Benjamin Franklin,s endowment for the city of Philadelphia of several thousand dollars became millions after eons of year.
If you put your money in a egg nest that never loses, then the small amount doubles after several years.
Here you can use the rule of 72. If it is 7.2 %, the money doubles in l0 years. etc.
