A native of South India, Acharya Chanakya was a Minister at the local court of the Nanda Dynasty. During his tenure, he played a key role of a strategist, an administrator, an economist, and a shrewd politician. He did whatever he could do to strengthen the whole kingdom. But rarely he was found in agreement with the dynasty’s ruler, Dhana Nanda.
It was Siberian-cold midnight of 14th April 1912. The 1st World War was just 2 years away. Believed to be unsinkable, The Titanic was on its maiden voyage towards New York. At 26 miles per hour, she was invading through the harsh and crazy temperatures at her full speed.
In 1964, Gary Flandro stated that the outer planets – Jupiter, Saturn, Uranus, and Neptune – would align in a rare pattern in the late 1970s. And NASA scientists really wanted to catch hold of such event that occurred only once in 2 centuries. 176 years to be very precise. But how? By launching a mission that would take a road trip towards these giant marbles. In less time. With less cost.
Curt Degerman spent his adult life collecting plastic cans from the trash bins. Being a ragpicker, he never paid even a single penny for a meal. He consumed whatsoever unconsumed food he found in the bins of restaurants. Neither he married. Nor he had a family of his own. Just lived a solitary life. For forty long years, he cycled across his town in Sweden, picked up cans and exchanged them with a recycling plant for money.
Felix Baumgartner was sixteen when he jumped off a building for the first time. That’s when he realized it was what he really wanted to do. Jumping off the bridges, parachutes, mountains, and pillars. But he had no idea what his future had in store for him. Never he had imagined that his luck would take him 39 km above East Mexico and make him jump at a speed that would exceed the speed of sound.
I am sure that all of you must have heard about the famous Manhattan Island in New York City. It’s one of the financial and commercial centers of America which also includes the iconic Empire State Building as well as Times Square.
But do you really know how much did Indians of Manhattan get from immigrants by selling it in 1626? Just$24.
Yes, Indians of Manhattan sold the whole island for $24. Today, the book value of the whole land is worth $30-Billion (as per reports). And if you believe the market reports, the value of the land should be double the book-value i.e. $60-Billion. The value appreciated by whopping 216666666567% in these many years. Big deal, right?
Hold on. Let me show you the other side of the story.
What if the Indians of Manhattan had invested those $24 in 1626 at the rate of 8%? Well, the amount of $24, compounded annually at the rate of 8% in a time period of 1626-2017, would have been worth $281-Trillion. Money would have compounded for whopping 391 years.
Had they invested it at 7%, the final amount would have been $7.4-Trillion. And that’s the difference a minute change in percentage makes. A difference of 1% CAGR would have reduced the final amount by a huge margin of $273.6-Trillion.
Lessons to be learned from this story:
- Always take a long-term perspective while investing your money.
- Let your money compound for a long period of time. It’s when it works best.
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