Quarterly Review Q1 2024 - Adventurous final - Flipbook - Page 12
Investment insights
The extraordinary power of compound
growth
In the world of 昀椀nance, few concepts wield as much in昀氀uence and potential as compound growth.
At its core compound growth is elegantly simple yet incredibly powerful and is a phenomenon that
helps turn modest investments into substantial wealth over time.
The extraordinary power of compound growth can be illustrated by the famous story of the grain of
rice. It goes like this:
Imagine you have a chessboard, and on the 昀椀rst square, you place one grain of rice. On the second
square, you place two grains, doubling the amount. On the third square, you place four grains,
doubling again, and so on, doubling the amount of rice for each square.
At 昀椀rst, it doesn't seem like much, but as you continue, the amount of rice grows exponentially. By
the time you reach the 64th square, the amount of rice would equate to 18,000,000,000,000,000,000
grains of rice which is equal to about 210 billion tons. That’s a lot of rice.
The important takeaway here is although that first grain of rice or pound may seem
modest, getting invested (and staying invested) allows the power of compound
growth to take effect.
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