So I play golf, it's a stupid game that only frustates and annoys me but I am a bit addicted chasing after that perfect shot. Now for those of you that don't know anything about it, you play 18 holes in a round of golf. Now imagine if you will, we are playing a round together and as we are at the first tee whilst selecting your club, I say to you "why don't we bet 10p on each hole" now you might think, "well I'm a decent golfer, and what's the worst that can happen? I'll lose £1.80".
And then just as you are about to take your first shot, I say to you "Why don't we make it interesting, and double the amount each hole - 10p on the first, 20p on the second, 40p on the third, and so on?"
So you think "Sure, why not" and agree.
Well you had better be very good at golf, because you just made a huge bet.
So let me walk you through it.
As we said, after 3 holes you are at 40p,
4th hole is worth 80p
5th hole is worth £1.60
6th hole is at £3.20
So we are a third of the way through and we are over the initial £1.80 you had bet to start with. Well you might think that isn't so bad. Let's keep going...
7th hole is £6.40
8th hole is £12.80
9th hole is £25.60
So half way and we are now betting £25.60 on one hole! so it's more than you thought, but you might not be remortgaging the house just yet, but let's keep going.
10th hole is £51.20
11th hole is £102.40
12th hole is £204.80
13th hole is £409.60
14th hole is £819.20
Now you might be hoping that the round ends very very quickly, but there is still 4 holes to go.
15th hole is £1,638.40
16th hole is £3,276.80
17th hole is £6,553.60
On the 18th hole, we are betting £13,107.20!
Added up together, the total winnings from all 18 holes would be £26,214.30 whereas if you had spent your winnings after every hole you would only have got £1.80 - it's quite a difference!
This is how you achieve whatever you want to achieve. I'm not talking about golf, or gambling, I'm talking about compounding. You have to keep reinvesting your results back into yourself and also you have to start now!
How easy is it to undo the good work you have done in the gym with a big night out, a chinese takeaway or even just by missing a few sessions.
Now this can apply just about anywhere in life, you have to keep reinvesting in yourself and improving. That might be progressively building muscle, burning calories or anything. The other thing it teaches us, is that it's really important to start now! Just imagine if we had waited until half way round? The maximum you would have been able to achieve is £25.60. So whatever it is in life that you want to achieve, you need to take the initiative and start now.
So there it is, the secret to getting rich!