Did you know that if you fold a piece of paper 103 times, it will become larger than the observable universe? That’s a mind-boggling 93 billion light years.
It might seem impossible to grasp, but it is all about the power of compound growth, a force that can work wonders not just with paper, but with your money, too.
Back in my 20s, when asked about pensions, I couldn’t help but chuckle. Retirement was the last thing on my mind. Tuition fees, rent, student loans and career prospects took precedence.
But looking back, I wish I had heeded the wisdom of US author Tony Robbins, who emphasised that true wealth does not come from earning alone but from setting aside a portion of your money and letting it grow through investment.
It is how you make money work for you instead of the other way around.
Yet some people try to take shortcuts. They gamble their money in emotionally driven investments, hoping for quick riches. Others simply procrastinate, believing retirement is too far off to worry about.
However, hope is not a strategy. It is why 95 per cent of people find themselves living below their desired standard in retirement.
So, how can you ensure you are among the financially successful 1 per cent?
Let us return to our paper analogy for a moment. A typical sheet of paper is about 1/10th of a millimetre thick.
When you fold it in half, its thickness doubles. With each subsequent fold, the thickness grows exponentially. Just 103 folds, and you’re outside the observable universe.
The lesson here is that when harnessed correctly, the power of compounding can be your key to wealth, no matter your age.
However, most people fail to grasp the incredible power of compounding. It is like the multiplying force of growth times growth.
This is why getting on the right financial path and staying on it is crucial for your future financial well-being.
Let us explore another analogy, this time involving a chessboard and rice.
As the tale goes, a traveller defeats a king in a game of chess and requests rice as his reward. The king agrees, with the stipulation that each square on the chessboard should have double the amount of rice as the previous one.
As the squares fill up, the required rice grows exponentially. By the time the traveller reaches the last square, he needs an astronomical amount of rice (9,223,372,036,854,775,808 grains of rice to be precise).
The story illustrates how compounding can turn small amounts into vast sums over time.
Now, let us apply this concept to investing.
Consider two friends, Will and Mike. Will starts investing at 19, puts away £500 ($606.7) a month for eight years, and then stops. His invested money, however, continues to compound.
Mike, on the other hand, starts later at 27 and consistently invests the same amount until he is 66.
Despite investing for 31 years longer than Will, Mike ends up with less money, simply because he started later (and was never able to catch up).
Will’s account, thanks to compounding, reaches about £2,901,579.42 at age 66, while Mike’s is at £2,537,257.67.
The difference? £364,321.75. If Will had continued investing until 66, he would have amassed £5,511,115.02.
The key takeaway here is that even small, consistent efforts can lead to substantial progress over time.
In the world of investing, a 10 per cent annual return, similar to the historical average of the US stock market, can double your money every seven years.
Time is the investor’s best friend, allowing you to make up for a lack of substantial initial capital.
Whether in life or investing, compounding is a powerful force. You might say that the life equivalent of compound interest is wisdom.
Learning from the past can help us make better decisions in the future, and those lessons build on one another over time.
Now, the people I often speak to are well beyond their 20s, dealing with complex financial matters.
So, how can you achieve similar success? It boils down to a few simple (but not easy) steps:
1. Find clarity about your “why” and your current financial situation.
2. Be confident about your vision for the future.
3. Take control of your ideal future and be accountable for its progress.
Often, it helps to seek sage guidance from someone who has a deep understanding of your situation and objectives.
That is the recipe for ensuring you are not just hoping for a financially secure future, but also actively working towards it, using the incredible power of compounding to build wealth over time.
Sam Instone is co-chief executive of wealth management company AES
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MATCH INFO
Uefa Champions League final:
Who: Real Madrid v Liverpool
Where: NSC Olimpiyskiy Stadium, Kiev, Ukraine
When: Saturday, May 26, 10.45pm (UAE)
TV: Match on BeIN Sports
Teams
Punjabi Legends Owners: Inzamam-ul-Haq and Intizar-ul-Haq; Key player: Misbah-ul-Haq
Pakhtoons Owners: Habib Khan and Tajuddin Khan; Key player: Shahid Afridi
Maratha Arabians Owners: Sohail Khan, Ali Tumbi, Parvez Khan; Key player: Virender Sehwag
Bangla Tigers Owners: Shirajuddin Alam, Yasin Choudhary, Neelesh Bhatnager, Anis and Rizwan Sajan; Key player: TBC
Colombo Lions Owners: Sri Lanka Cricket; Key player: TBC
Kerala Kings Owners: Hussain Adam Ali and Shafi Ul Mulk; Key player: Eoin Morgan
Venue Sharjah Cricket Stadium
Format 10 overs per side, matches last for 90 minutes
Timeline October 25: Around 120 players to be entered into a draft, to be held in Dubai; December 21: Matches start; December 24: Finals
COMPANY%20PROFILE
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Brief scores:
Toss: Sindhis, elected to field first
Pakhtoons 137-6 (10 ov)
Fletcher 68 not out; Cutting 2-14
Sindhis 129-8 (10 ov)
Perera 47; Sohail 2-18
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You may remember …
Robbie Keane (Atletico de Kolkata) The Irish striker is, along with his former Spurs teammate Dimitar Berbatov, the headline figure in this season’s ISL, having joined defending champions ATK. His grand entrance after arrival from Major League Soccer in the US will be delayed by three games, though, due to a knee injury.
Dimitar Berbatov (Kerala Blasters) Word has it that Rene Meulensteen, the Kerala manager, plans to deploy his Bulgarian star in central midfield. The idea of Berbatov as an all-action, box-to-box midfielder, might jar with Spurs and Manchester United supporters, who more likely recall an always-languid, often-lazy striker.
Wes Brown (Kerala Blasters) Revived his playing career last season to help out at Blackburn Rovers, where he was also a coach. Since then, the 23-cap England centre back, who is now 38, has been reunited with the former Manchester United assistant coach Meulensteen, after signing for Kerala.
Andre Bikey (Jamshedpur) The Cameroonian defender is onto the 17th club of a career has taken him to Spain, Portugal, Russia, the UK, Greece, and now India. He is still only 32, so there is plenty of time to add to that tally, too. Scored goals against Liverpool and Chelsea during his time with Reading in England.
Emiliano Alfaro (Pune City) The Uruguayan striker has played for Liverpool – the Montevideo one, rather than the better-known side in England – and Lazio in Italy. He was prolific for a season at Al Wasl in the Arabian Gulf League in 2012/13. He returned for one season with Fujairah, whom he left to join Pune.
The five pillars of Islam
1. Fasting
2. Prayer
3. Hajj
4. Shahada
5. Zakat
COMPANY PROFILE
Name: Cofe
Year started: 2018
Based: UAE
Employees: 80-100
Amount raised: $13m
Investors: KISP ventures, Cedar Mundi, Towell Holding International, Takamul Capital, Dividend Gate Capital, Nizar AlNusif Sons Holding, Arab Investment Company and Al Imtiaz Investment Group
PRO BASH
Thursday’s fixtures
6pm: Hyderabad Nawabs v Pakhtoon Warriors
10pm: Lahore Sikandars v Pakhtoon Blasters
Teams
Chennai Knights, Lahore Sikandars, Pakhtoon Blasters, Abu Dhabi Stars, Abu Dhabi Dragons, Pakhtoon Warriors and Hyderabad Nawabs.
Squad rules
All teams consist of 15-player squads that include those contracted in the diamond (3), platinum (2) and gold (2) categories, plus eight free to sign team members.
Tournament rules
The matches are of 25 over-a-side with an 8-over power play in which only two fielders allowed outside the 30-yard circle. Teams play in a single round robin league followed by the semi-finals and final. The league toppers will feature in the semi-final eliminator.
How to avoid crypto fraud
- Use unique usernames and passwords while enabling multi-factor authentication.
- Use an offline private key, a physical device that requires manual activation, whenever you access your wallet.
- Avoid suspicious social media ads promoting fraudulent schemes.
- Only invest in crypto projects that you fully understand.
- Critically assess whether a project’s promises or returns seem too good to be true.
- Only use reputable platforms that have a track record of strong regulatory compliance.
- Store funds in hardware wallets as opposed to online exchanges.
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The biog
First Job: Abu Dhabi Department of Petroleum in 1974
Current role: Chairperson of Al Maskari Holding since 2008
Career high: Regularly cited on Forbes list of 100 most powerful Arab Businesswomen
Achievement: Helped establish Al Maskari Medical Centre in 1969 in Abu Dhabi’s Western Region
Future plan: Will now concentrate on her charitable work
Director: Laxman Utekar
Cast: Vicky Kaushal, Akshaye Khanna, Diana Penty, Vineet Kumar Singh, Rashmika Mandanna
Rating: 1/5
The specs
Price, base / as tested Dh12 million
Engine 8.0-litre quad-turbo, W16
Gearbox seven-speed dual clutch auto
Power 1479 @ 6,700rpm
Torque 1600Nm @ 2,000rpm 0-100kph: 2.6 seconds 0-200kph: 6.1 seconds
Top speed 420 kph (governed)
Fuel economy, combined 35.2L / 100km (est)
RESULTS
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Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
BRAZIL SQUAD
Alisson (Liverpool), Daniel Fuzato (Roma), Ederson (Man City); Alex Sandro (Juventus), Danilo (Juventus), Eder Militao (Real Madrid), Emerson (Real Betis), Felipe (Atletico Madrid), Marquinhos (PSG), Renan Lodi (Atletico Madrid), Thiago Silva (PSG); Arthur (Barcelona), Casemiro (Real Madrid), Douglas Luiz (Aston Villa), Fabinho (Liverpool), Lucas Paqueta (AC Milan), Philippe Coutinho (Bayern Munich); David Neres (Ajax), Gabriel Jesus (Man City), Richarlison (Everton), Roberto Firmino (Liverpool), Rodrygo (Real Madrid), Willian (Chelsea).
Labour dispute
The insured employee may still file an ILOE claim even if a labour dispute is ongoing post termination, but the insurer may suspend or reject payment, until the courts resolve the dispute, especially if the reason for termination is contested. The outcome of the labour court proceedings can directly affect eligibility.
- Abdullah Ishnaneh, Partner, BSA Law
