The exponential effect. Why Thailand is in debt.
It is a very valuable lesson in life to learn but so many still don’t understand it.
The exponential effect is based on a simple question:
Would you like one million US dollars in your hand right now, or 1 Dollar that doubles every day for 30 days?
Be honest with yourself and answer quickly, and don’t change your mind, before we actually do the exercise, and then with your 1 million USD in your hand let’s do the math:
Day 1: 1 USD
Oooh, you are $ 999,999 better off don’t you feel happy with yourself now!
Day 2: 2 USD
Day 3: 4 USD
Your thinking; that this is proving your point!!
Day 4: 8 USD
Day 5: 16 USD
Day 6: 32 USD
Day 7: 64 USD
Day 8: 128 USD
Day 9: 256 USD
Day 10: 512 USD
A third of the way in and it’s still looking miles better for you and your still gloating! Let’s continue…
Day 11: 1024 USD
Day 12: 2048 USD
Day 13: 4096 USD
Day 14: 8129 USD
Day 15: 16384 USD
Day 16: 32,768 USD
Day 17: 65,536 USD
Day 18: 131,072 USD
Day 19: 262,144 USD
Day 20: 524, 288 USD
Two thirds of the way through this daft exercise and you are still miles better off you’ve probably spent your million bucks by now and still laughing and scoffing at me eh! Oh but wait for the magic in the last third!
Day 21: 1,048,576
Yes we have now surpassed your million dollar mark and now this is where it gets crazy!
Day 22: 2,097,152
Day: 23: 4,194,304
Who’s starting to feel like a mug now??
Day 24: 8,388,608
Ooh was that an extra comma? Yes it was!!
Day 25: 16,777,216
Day 26: 33,554,422
Day 27: 67,108,864
No don’t go come back, there are loads more!!
Day 28: 134,217,728
Day 29: 268,435,459
Day 30: 536,870,912
I will write that in numbers for you so you get the real grasp of the enormity of 1 USD doubled every day for thirty days!
Five hundred and thirty six million, eight hundred and seventy thousand, nine hundred and twelve Dollars.
Basically; over half a billion dollars.
Did you take the million or are you nearly a billionaire?
I wanted to prove a massive point about instant gratification.
Our parents and more so their parents, saved for everything they wanted, and they borrowed nothing from banks. Seems the Millennials need everything that it took our folks 25 years to save up for as soon as he carries her across the threshold. Debt is normal these days.
Take household debt in Thailand:
In 2005, household debt amounted to 3.4 trillion baht. Today, the amount has more than tripled. Thai households now owe 10.7 trillion baht to financial institutions. From 2005-14, household debt rose by 13.4% per year, almost double the nominal GDP growth rate. The ratio of household debt to nominal GDP jumped to 80% from 45% during that period.
10 Trillion baht, divide that by around 80 million Thais = A LOT OF DEBT PER PERSON.!!
So when you see that nice 4 bed roomed house with 5 bathrooms (I never knew why Bathrooms are a sign of wealth here but..) and the new 4×4 sitting pretty in the carport along with the wifey’s car and the shiny new I Phone in the hand of the girl working in the shopping mall, and the facts don’t lie:
IT’S MOSTLY ALL BORROWED!
So with this mentality in mind, I can see why it is so hard to make people understand that running a traditional business with borrowed money is just senseless. However; as much as I respect the baby boomers for their savings mentality, they are the least qualified to educate Millennials on the business start up front.
They are proud to see their children borrow a great deal of money from a bank, open a shop and sit and wait for customers day after day, and when they have a deficit after earnings for the first two years they give them all the moral support they need.
Yet when they run a business that makes money from day one albeit tiny amounts they break out in a sweat and are suddenly very concerned for the well-being and mental state of their young!
I was recently scoffed at by a so called friend for making a small amount of money on Wowapp a new messenger app that has a very unique selling point that it pays people to chat on the app via ad revenue.
The app pays in wow coins and 100 Wow coin is ONE USD
When you start on Wowapp the daily earnings through ad revenue share is like 0.002 Wow coins and it takes a good month or two of hard work to earn your first dollar! This is where you get to see people’s mettle as in:
Can they see a few months down the road, or do they just see that they earned such a trifle amount today?
You see; although Wowapp is not calling itself a Multi Leveled business it still operates on revenue from eyeballs seeing ads and the system needs more and more people to see ads.
There is an inviting system and Multi level payments from building a network. So for most of us who have been in business for many years and have a reasonable grasp of M.L.M.; it’s an M.L.M. with ad revenue!
I started Wowapp on 20th January 2016 and now have over 700 people in my network from just over 100 people directly invited. My earnings have gone up by 2000% I don’t do anything now but I get several new members join every week.
I am starting to feel quite excited
I have always remembered the exponential affect and I am looking at 6-24 months down the road and earning a good residual income that will actually mean a decent salary in the West, all because my parents taught me; to keep an eye on today, but dream strong for tomorrow.
Netmedia Thailand are UK recognized small business mentors and fellows of the UK Institute for Sales and Marketing, we are also the top social media marketing trainers in Thailand and we like Wowapp. And we can show you how to make money on it too!
Just don’t expect to get rich in 6 months, but keep going and maybe through hard work in 18-24 months you could be on a nice earner!