There lived a poet in a small village, he had 2 sons and a wife in his family, for the last few months, he was not able to earn enough to provide enough food and other facilities to his family. At last, he decided to visit the king of the village to find a solution to his problem.
Poet was welcomed by the King. The king inquired about his reason for being there today. Poet said that he wanted to recite his till date best poem to the great King and win his reward. The King immediately agreed to listen to his poem. So, the poet started and within a few moments, he made all mesmerized with his marvelous poem. As decided earlier, the King asked the poet for his wish. The poet stated his wish and everyone was startled to hear his wish.
The poet asked for a piece of rice grains but with one condition.
He pointed towards the chessboard and asked to place just one piece of rice grain on the 1st square (1 piece of rice) , then double it in the 2nd square (2 piece of rice), then double it in the 3rd square (4 piece of rice), then again double it in the 4th square (8 piece of rice) and repeat this doubling procedure of rice till square number 64! ( A chessboard has total 64 squares)
The emperor was amazed at why did the poet ask for such a small reward when he had the opportunity to ask for a big one. But as promised by him, the King asked his treasurer to do as asked by the poet and the process started.
Initially, the chessboard looked like this:
But gradually, the game started changing. By the time, they reached 25th square, the count of rice grains required for that square reached 1.6 crores!! For the 26th square, they required to give 3.3 crore rice grains but by that time storage house went stock out!
But as the King had promised to the poet, the treasurer ordered more rice grains from the market after the King’s approval. When they reached 30th square, they had already given 107 crore rice grains to the poet and now the King couldn’t give any more rice grain to the poet. With no option left in his hand, the King had to relinquish his entire empire to the poet and left his kingdom!
What we can learn from this story?
It tells us about the beautiful effect of Power of Compounding.
It starts with a very small amount but gradually it goes to become so big that you can’t even imagine. The king just saw the initial one rice, but he forgot that chessboard has 64 squares! Same we just see the small monthly investment amount but we forget that we are investing every month and that also for 10-15-20-25 years, each year has 12 monthly investments.!So start investing in high quality growing companies as early as possible and invest for decades to create magnificent wealth!
