If you think about banks and institutional investment vehicles, they offer 5% to 10% per year. So 1000% percent could be viewed as quite unlikely. Or is it?

One thing I have noticed about money over the years is that smaller amounts of money compound faster than large blocks of money. Why is that? I think the psychology of humans plays a large role. Going from $100 to $110 on a scale of difficulty would sound low, but it is a 10% increase.

How hard would it be to increase $100 to $110 in say a week or a month. Can you think of ways to increase a $100 to $110 in a week or two? I am certain if you put you mind to it, you could find a way. If you think about it, if you could turn $100 into $110 in say a week for simplicity. There are 52 weeks in 1 year so your annual return would be 520% Not bad compared to banks. You would have added $530 to your bank balance for a total of $620.

But what if we introduced compounding?

If you were able to compound that initial $100 by 10% instead of just focusing on getting that 10% every week you would find the result a little more staggering. The result is over $300,000 by the end of the year. Quite a difference. Invest cheap? I think not!