Solano Real Estate Scene: The magic of compound interest

If someone offered you $2 million right now or the option of one penny the first day and then doubled it every day for 30 days, what option would you take? Most folks would take the lump sum right now. This would be a $5 million mistake because one penny doubled every day for 30 days turns into more than $7 million. I always tell my team, my kids and my friends that life is all about the math. The magic of compound interest question above is often used by businesses when teaching sales people and potential clients about the power of consistency when investing. The “compound effect” is something taught by business coach, author and speaker Darren Hardy. I just saw him in San Diego as one of our keynote speakers at my company’s annual symposium this past week and was impressed by his incredible story and his ability to simplify the keys to success in real estate, the mortgage industry and life itself. The “compound effect” is about the small choices we make each day and how important it is to make smart small choices consistently to achieve success and how over time these choices compound into something big. For example: If you want to get healthier and lose some weight, simply cut out 125 calories per day and walk 1,000 extra steps per day and you will lose a bunch of weight after three months. Another example for small business owners, real estate agents and pretty much any sales people is making an extra one or two sales calls per day before you go home at night for three months. The results may not be noticed during the first month but after two months the “compound effect” kicks in and results will show up with significant improvement to your bottom line. Finally, the magic of compounding can apply to relationships. If a guy simply and sincerely tells his wife one thing he appreciates about her each day for 90 days in a row, the compounded effort will make for a happier marriage and partnership and you may even see some reciprocity. Good luck and stay thirsty my friends.