The Mustard Seed

I have given many financial seminars where I start out with the story of two employees.. Each employee is giving the option of receiving $1,000 per day in wages for 28 days or starting with a penny and having their wage double each day.

Most people assume the $1,000 per day will be a much higher number, but lets review the numbers

• After week one, employee # 1 have $7,000 in wages, employee # 2 will have a $1.27
• At the end of week 2, employee # 1 is up to $14,000 in total wages, employee # 2 has $163.83
• After three weeks, the two employees are almost equal. # 1 has $21,000, # 2 has $20,971.51
• At the end, employee # 1 has earned $28,000. Not bad wages for a less than a month. However, # 2 has earned a total of $2,684,354.55.

Like the mustard seed that starts as a very small seed and grows into a large plant at maturity, the power of interest compounding starts small and over time becomes very powerful.