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Jan 26, 2005

Began with a Rupee for Laloo

Manmohan noticed that Laloo was procrastinating many decisions. Being an economist, he decided to use the power of compounding to teach a lesson and invited Laloo to a game of golf.

Manmohan told Laloo that if he missed the first hole he would have to pay him one rupee; from there on it would be double for every hole that he missed. Laloo thought for a moment. Manmohan was asking money for every hole he would miss, not every shot, there are 18 holes, and they were starting at Re.1 one only. He tried to calculate how much he would lose if he missed all the 18 holes, but decided it wouldn't be much anyway. And of course he couldnt get it right immediately in every hole.

And at the end, he gave a Rs.100 note to Manmohan and asked for the change. But Manmohan asked for the balance of Rs.1,30,972! Laloo got angry and asked for
the calculation. Prepared for it, Manmohan gave him the calculation sheet. Hole
Amount Owed

1 1

2 2

3 4

4 8

5 16

6 32

7 64

8 128

9 256

10 512

11 1024

12 2048

13 4096

14 8192

15 16384

16 32768

17 65536

18 131072

Metaphorically, what we do not realise is that when we postpone doing something in life even by a day, the gap in the beginning is only "2 minus 1" but the gap later is "131072 minus 65536". Our procrastinations may not hurt us too much in the beginning but what we will be deprived of in the long run can be very damaging.

Thankfully Manmohan didnt invite Laloo to a game of chess and start at Re.1 for the first square ask it to be doubled for every square in the game i.e 64. It would have started at Re.1 and for the 64th square it
would have been Rs.18,446,744,073,709,600,000. Even chess, at the 16th square , quarter way mark its just Rs.65,536. And in the half way mark at 32nd square, it becomes Rs.42,94,967,296. And remember it started at Re.1.

We understand the importance of health and fitness but we postpone our efforts in that direction. We realise the importance of financial planning and investment but we procrastinate our initiative that direction. We comprehend the importance of board exams but push our preparations till it becomes a crisis. We find pushing papers into the pending folder as the most convenient option.

Of course you can replace the characters with your own personal favourite characters and get a good laugh. Or you can decide, the life and the lifestyle you want at 60s and 70s. The benefits of any habit or deed, good or bad is always compounded. We may not appreciate the
importance of healthy food or exercise or financial planning or communicating our love to our family now. Most of us are still at an early hole, lets make the choices now. And let the power of compounding work, in every sphere of our life. Perhaps Laloo wouldn't have agreed if he knew about the magic of compounding in the beginning. Now you know it, if you decide to procrastinate even now, you will be dumber than the Laloo in the story.

The choice is yours :)

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