You might’ve stumbled upon this question before: Would you rather have a million dollars today or a penny which doubles each day for 30 days?
If you made an impulsive, quick response, you would’ve picked the million dollars.
But you might like to think twice, as this is where the superpower of compound interest comes in.
Interest and business loans
This concept is commonly applied in finance. Its interest that includes all the accumulated interest of previous periods of a deposit, business loan, or investment.
At Lumi, we offer unsecured business loans with a different interest structure known as an amortized loan. Unlike compound interest loans, interest is calculated based on the most recent ending balance of the loan, while the interest amount owed decreases as loan payments are made. This is a great structure for small business loans, and more information can be found on our homepage’s loan calculator.
Let’s talk life, not business loans
Let’s put small business loans aside for a second. What you might not realise is that this growth can be applied to almost all areas of life. Whether it’s from relationships in life, working out, making money, learning, or even your diet, the true benefits come from compound interest.
When you’ve done business with someone or you’ve been friends with someone for 10 years, 20 years, or even 30 years, it just gets better and better. You begin to trust them more, the friction goes down, and you can do bigger and bigger things together. A good example of this is getting married, as the relationship becomes invaluable compared to more casual relationships. It’s also true in areas such as fitness, as it’s easier to stay fit rather than become fit.
Getting Started
Starting can be done through the little stuff, whether it’s not eating that bar of chocolate every day, or picking up that dusty book in the corner of your room and reading 10 pages a day.
Sounds easy right? Well, not quite.
Just because it’s easy to do, doesn’t mean it’s easy not to do. This is kind of a paradox, since these easy tasks are also easy to skip. You might recognise saying one of the following to yourself:
- “I’ll read 10 pages tonight”
- “I’ll work out tomorrow morning instead to burn off this donut”
- “I’ll get that project done next week”
This is our brain overestimating how long small tasks will take, and can end with procrastinate. This is why self-awareness and consistency is key.
Go out there, own yourself, and be the hero you truly are.
Additional Resources
For more information to help you run a successful small business, check out the following articles:
- Small Business Marketing Tips to Boost Your Holiday Sales
- Tips for Surviving Your First Year in Business
- Working Capital: What is it and Why Does Your Small Business Need it?
- 25 Ways to Grow Your Small Business Fast
If you’re looking for funds to help give your venture the boost it needs, a small business loan could be the solution! Call 1300 00 LUMI or visit our website to see how an unsecured business loan can help you.
