Would You Take $1 Million Now or a Penny That Doubles?
There’s an old financial riddle: Would you rather take $1 million today or a single penny that doubles in value every day for a month?
It sounds like an easy choice, but the math — and the lesson — may surprise you.
The Doubling Penny Math
If you double a penny every day for 30 days, the final value isn’t a few hundred dollars, or even a few thousand. By day 30, that penny is worth $5,368,709.12 — just under $5.4 million.
- After 7 days: $1.27 — barely enough for a vending machine soda.
- After 15 days: $614.40 — impressive growth, but still far from $1 million.
- By day 30: over $5.3 million.
This is the power of compound growth — dull at first, incredibly fruitful over time.
Why Compounding Feels Boring (At First)
As Carl Richards often points out, compounding doesn’t feel exciting in the beginning. The numbers creep upward slowly, almost invisibly.
That’s why so many people choose the instant $1 million in the riddle. Human nature prefers immediate gratification over patient, steady growth. But those who can wait — who let compounding do its quiet work — often see the biggest rewards.
Warren Buffett’s Example
Warren Buffett calls compounding one of the greatest forces in wealth creation. His own net worth shows the effect:
- At age 30, Buffett was worth around $1 million.
- By 59, his wealth had grown to $3.8 billion.
- Today, at age 94, he’s worth roughly $160 billion.
Buffett himself has called his investing style “boring.” Yet boring compounded over decades becomes extraordinary.
The Takeaway
No investment will double daily like in the penny riddle. But the story illustrates a powerful truth: time and patience are the secret ingredients of financial growth.
Compounding may not feel exciting at first, but when allowed to build quietly over years, it can create wealth far greater than what instant results ever offer.
Final Thought
Next time you hear the $1 million vs. doubling penny question, you’ll know the answer — and the lesson: wealth grows not by rushing, but by letting compounding work its magic over time.
📧 Want to talk more about how compounding fits into your financial plan? Reach me anytime at Dan@forwardthinkingwm.com.