37.8 or 0.03
Does this headline remind you of something?
Compounding is what I was trying to get at.
As you know, compounding works in both directions.
Can you guess the number of times you would improve (in a year) with a 1% daily improvement?
Let me give you the answer.
(1.01)365 = 37.8
On the other hand, if you were to dip 1% daily over a year, the result is as given below.
(0.99)365 = 0.03
For most people, a 1% improvement daily is a real possibility, and you can actually achieve it. On the downside though, most people might not decay so fast, but they decay at a rate that is not visible to them. The worst part is that they can’t even feel it.
I see so many firms in our industry slowly decaying. The unfortunate part is that they can’t see it, because of the mark to market appreciation in the value of their assets.
What’s happening with you and your firm?
It’s time to make a realistic assessment of where you truly stand.