The Right Time To Quit
I've so often used this explanation, but never got round to making a picture of it.
This is how a business, any business, including your internet business, grows.
Doubling every day is not realistic, so read it as weeks or months for a more realistic timescale, but so many people battle through to "day" 14 and give it up 'cos it's "going nowhere".
If only they'd stuck it out another week, to "day" 21.
If you have any doubts about the mathematical logic of this, just run up a spreadsheet and do your own calcs.
Definitely change "day" to "month". Maybe use 10% growth rather than doubling.
Once you've done it, watch what happens if you take money out of the system too soon. For example, take out $100 on "day 15" and see the impact.
The real growth comes from feeding profits back into the growth.
FYI: This is why, when a bank gives you a credit card, it doesn't care too much about you paying back the debt in the first fortnight. By day 15 you are hooked into them for life.
Recent Comments
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Hi Chris you have started a good conversation , I love the vibrancy of this community . The doubling equation is quiet a polarizing way to look at the returns of enterprise . Who's to say it can't be done . The take home for me is that we need to create our own formula by like you say changing our input values so they reflect our business goals and aspirations . Like the wise man said what is measured can be , on reflection managed .
I really like the concept of feeding profits back into our businesses , I believe strongly that this is one of the main factors in creating sustainability. Thank you for sharing your insights Chris .
Alexander
I've known about starting with a penny and doubling it every day for about 30 years, but I actually have never seen it written out.
Bravo!
That's why I grabbed the pic.
I have a spreadsheet version where I just stick in various interest rates and timescales and starting capital etc, then just read off the bit of the calc I'm after.
I've often thought of doing it as a pic, but never got round to it. This pic is a bit artificial but it does the job.
Awesome example of starting small and being persistent can reward you just keep an open mind and ass always stay your coarse
Yes it is the persistence that is the message. But there's more to it than that.
The thing that kicked it off was an email I received a day or two ago telling me I'd signed up a new affiliate. But it was an affiliation I'd allowed to lapse.
When I logged in, for the first time in nearly a year, I found several hundred dollars in commissions and several thousand affiliates in my downline.
That was not the result of what I'm doing today, but the result of what I did a year ago - planting the seed and letting it grow.
Ya if i would have put $100 in a compounding interest account when I had my first job in high school I'd be sitting pretty now. I try to get that through to my kids but it's hard to get them to think that far ahead.LOL
Marty
I wish they did that with my Teamster pension fund but the gambled that away on bad investments. Great motivation for WA however.
That's exactly how pension funds work.
It's not relevant how MUCH you pay in. The kicker is HOW LONG it stays in.
Run the calc on your $100 at 5% per year and see what happens after year 14.
In the UK we had a Chancellor Of The Exchequer who saw how UK pension funds were growing and decided that it was too tempting to resist.
So he stole £100bn ($150bn) from them to bankroll his Labour Party, destroying the pensions of millions of people - me being one of them.
http://www.telegraph.co.uk/news/uknews/1531448/Browns-raid-on-pensions-costs-Britain-100-billion.html
I do a Ry Cooder song called "No banker Left Behind" That talks about all the perks for those that handle everybody else's money.
I do it different and can't put it out because I don't have the rights. My politics are different than his but sometimes right is right no matter where you stand on other issues. ( sorry I'll stay out of politics )
I have listened to him for years and He was one that got me started on playing slide guitar.
Chris,
What you've shown is a doubling of a sum every day that starts with one cent ($0.01). This is known as a "Geometric Progression" and only applies to problems in theoretical mathematics and not to real world situations. This is clear from your calculations that show that the initial penny grows to over $10 million in 31 days. At this rate, in a matter of a few months a person whose income was growing at this rate would be collecting more than the Annual Gross National Product of America, a sum that defies imagination.
There's no business enterprise in the world whose revenue can grow by a "Geometric Progression," not even WA.
I'm afraid that the mathematical array you've relied on isn't an appropriate basis for the point you're trying to make. Sorry!
Gene
If you read the words as well as the numbers you'll see that it's not intended to be taken literally.
But all business grow somewhat exponentially, as do plants and animals, up to a point.
The message is to not abort the take-off, just at the point when the wheels leave the tarmac of the runway, just because you think that "the plane is not flying". Hang on in there.
It's also a message to not remove profits too early. Feed them back into the growth.
Personally I prefer to use the illustration with a 10% growth over a month. I apologise for being lazy and nicking someone else's image, but it was too handy.
Maybe I'll get round to doing my own, more realistic version, at some point in time.
Chris, you're correct, I did miss the qualifying statement in your post. I owe you an apology for calling you out on a point you had already recognized. Sorry!
Gene
Not a problem, I do it all the time.
The problem with skim reading is I sometimes miss that crucial little twist that throws the conversation in entirely a different direction.
That's very gracious of you Chris, and a valuable object lesson for me to take much more care when I read WA posts in the future. Thank you!
Gene
Hi Michael, I think it depends on the person. Some people need to to have a "Cloud 9" in their sights to be motivated, but that's a bit risky if the going gets rough and they decide that their original hopes were unrealistic. I agree with you, it's better to focus on the work that needs to be done and worry about the "quantum" after the machine (Web Site) is up and running.
Not sure what this is supposed to show. This seems to be just a geometric progression with the common ratio 2.
Same answer as above.
I accept that my post is probably is a bit obtuse without some lateral thinking being applied. I'll work on it some more.
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Great insight, Chris. This is a perfect illustration of business growth ~the very reason why a lot of great businessmen get to the top so fast. They know how to feed their profits back to their business.
Not very extinct, though. I believe there are still those who feed their profits back to their businesses and are great in its real sense. What you just described are not what I perceive greatness is. They are fools for doing that and I know they own nothing.
Two great businessmen right here - and others being taught and out there doing what's right because of their efforts. I agree. Not extinct.