Penny a Day Doubled for a Year – How It Works

Nobody’s ever heard of a penny a day keeping the wolf away, but you can hear it now. Just compute a penny a day doubled for a year and you will stagger at the amount.

Starting with just one penny – or cent – for a year could make you rich. Can you become a millionaire?

penny a day doubled for a year

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The Penny Dropped – Penny a Day Doubled for A Year

So the easiest thing would be the beginning: the penny. Or the cent. This is the humblest unit in the US currency pyramid.

It is such a small and underestimated coin that if you drop a cent in the dust, it wouldn’t even be picked up by anyone but your child – if you have one with you.

Or by a beggar, or a hawker, or trawler, if one happens to be passing by.

Yet, you need to value the cent. You see stores, banks or even houses stacked with boxes or trays of cents that fill you with happiness and make you feel prosperous.

And sure, they add up.

The total amount of a penny a day doubled for a year is so immense that the sheer length of the resulting number leaves you breathless.

$375,766,813,243,813,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000.00

How is that possible? It is possible because the one penny you start with gets doubled every day for 365 days. It’s not a matter of compounding yet. It is simply the power of math doubling a value daily.

Think of it this way. You are in the casino playing Roulette. Your strategy is to double the bet amount set to your favorite color until you win, and once you win, you go out of the casino and stop gambling.

Well, now imagine you always decided on the wrong color 365 times, and your first bet was 1 cent. If you would have doubled your bet amount 365 times, then the long number above would be your bet size with bet 365 (you doubled your previous amount 365 times). However, the cumulative amount lost would be even more significant if the wrong color appears at bet 365 again.

Now the total cumulated amount you lost would be:

$751,533,626,487,627,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000.00

Sure, that’s all hypothetical since that amount of money does not exist, but it shows the power of doubling a value in such frequency.

Let us take a closer look at the mathematical process by analyzing what happens within the first 30 days.

Penny Doubled Everyday for 30 Days

How much is a penny doubled everyday for 30 days?

If you doubled a penny every day for 30 days, the amount on day 30 would be $5,368,709.12. While in the beginning, the steps are small, from $0.01 to $0.02, then to $0.04 and $0.08, on day 25, you are already at $167,772.16 and $2,684,354.56 on day 29, before getting to $5,368,709.12 on day 30.

Day Amount
1 $0.01
2 $0.02
3 $0.04
4 $0.08
5 $0.16
6 $0.32
7 $0.64
8 $1.28
9 $2.56
10 $5.12
11 $10.24
12 $20.48
13 $40.96
14 $81.92
15 $163.84
16 $327.68
17 $655.36
18 $1,310.72
19 $2,621.44
20 $5,242.88
21 $10,485.76
22 $20,971.52
23 $41,943.04
24 $83,886.08
25 $167,772.16
26 $335,544.32
27 $671,088.64
28 $1,342,177.28
29 $2,684,354.56
30 $5,368,709.12

So, what exactly is wrong with the penny a day doubled formula explained above?

Nothing, really. Except that you are simply looking at the cent doubled as a simple amount, rather than a cumulative amount.

What exactly happens when you take the money doubled on the second day, and add it to the principal Cent collected?

You get a cumulative amount. This is what happens with another penny a day doubled formula. A penny a day doubled for a year can be checked for where it takes you.

The cumulative amount becomes important if your plan is to build wealth by saving more and more money. Let’s say you currently save the spare change and put it into a money box. One night you have the idea that you double the amount that you put in your money box every day. Now, let’s see what happens if you do this for 10 days:

Day Saved Amount (doubled daily) Cumulative Amount
1 $0.01 $0.01
2 $0.02 $0.03
3
$0.04 $0.07
4 $0.08 $0.15
5 $0.16 $0.31
6 $0.32 $0.63
7 $0.64 $1.27
8 $1.28 $2.55
9
$2.56 $5.11
10 $5.12 $10.23

So see how much more than double the investment is the amount after 10 days? It’s all about lessons that you learnt in middle school.

One lesson was called calculating your compound interest, and there is no reason to believe that the name is different today, or that It’s changed the basic calculations in anyway.

Compound interest is pretty powerful. That is what a penny a day doubled for a year does.

Invest and Invent

The important point a lot of you would like to know is, whether a penny a day doubled for a year is really possible or not.

If you leave your money alone, it would just reproduce and multiply. That’s what getting Double Pennies is all about.

After two to three weeks, the principal would be big enough to give you a stroke.

There are some ways of working out how a penny a day works upwards with double pennies.

One way is to visit some roulette games and try to increase your piles of money. However, that might halve your penny, so better not to do it.

Here are some ways of going the double pennies route:

Stock Market

Begin with an investment in the stock market.

It gets back to you with about 10% annually. Hence, if you start with the ‘Magic Penny’ which magically translates to $20,000, after which you decide to forget all about it, then your money nearly doubles after every seven years.

That is the saga of pennies worth money.

So let’s say that you start at $20,000 when you are just 20 years old. In seven years, at the age of 27, you have doubled your capital to $40,000. So metaphorically, it’s all about a penny a day doubled for a year.

The entire table works out this way:

  1. At the age of 20: $20,000.00
  2. At the age of 27: $38,974.34
  3. At the age of 34: $75,949.97
  4. At the age of 41: $148,005.00
  5. At the age of 48: $288,419.87
  6. At the age of 55: $562,048.74
  7. And now you retire being 62 years young with: $1,095,273.98

What +10% capital growth means if you begin with $20,000 at the age of 20 without doing anything until being 62 years old based on historical average stock market performance:

Age Amount
20 $20,000.00
21 $22,000.00
22 $24,200.00
23 $26,620.00
24 $29,282.00
25 $32,210.20
26 $35,431.22
27 $38,974.34
28 $42,871.78
29 $47,158.95
30 $51,874.85
31 $57,062.33
32 $62,768.57
33 $69,045.42
34 $75,949.97
35 $83,544.96
36 $91,899.46
37 $101,089.41
38 $111,198.35
39 $122,318.18
40 $134,550.00
41 $148,005.00
42 $162,805.50
43 $179,086.05
44 $196,994.65
45 $216,694.12
46 $238,363.53
47 $262,199.88
48 $288,419.87
49 $317,261.86
50 $348,988.05
51 $383,886.85
52 $422,275.53
53 $464,503.09
54 $510,953.40
55 $562,048.74
56 $618,253.61
57 $680,078.97
58 $748,086.87
59 $822,895.56
60 $905,185.11
61 $995,703.62
62 $1,095,273.98

You just have become a millionaire without doing anything. Sure, the stock market would have to perform as expected, and often enough, it seemed that the stock market would never see a new all-time high like after the dot-com bubble crash in 2000/2001 or during the financial crisis of 2008/2009.


Investment newsletters and stock picking services can help to boost the annual return rate from an average of +10% per year to +20% annualized return. Here are three of the most popular services:

Doubling up the annual average growth of a portfolio statistically lets investors reach the 1 million dollar mark 20 years faster compared to the 10% annual return:

Age Amount
20 $20,000
21 $24,000
22 $28,800
23 $34,560
24 $41,472
25 $49,766
26 $59,719
27 $71,663
28 $85,996
29 $103,195
30 $123,834
31 $148,601
32 $178,321
33 $213,985
34 $256,782
35 $308,138
36 $369,766
37 $443,719
38 $532,463
39 $638,956
40 $766,747
41 $920,096
42 $1,104,115

Stock picking services vs. investing on your own

Investing in the stock market without a clear, structured plan is gambling, and gambling is typically not that good from a long-term perspective.

That’s why it can be worth it to learn more about the stock market, join an investment community, or rely on stock picks from experienced investors and traders.

Lender

You can also become who is popularly thought of as a ‘shark’ – a money lender! This is an option opened to you by Prosper or Lending Club.

That’s a great way too of letting your investment work for you instead of making you slog.

Check out some cool ways in which they help you to increase your investments. Look up their prospectuses, assess and understand the penny a day challenge involved in them and then make up your mind.

If you are wondering which one would be better, then just invest in both and watch how a penny a day doubled for a year.

401(k) Plan

This is a traditional scheme that helps you to double your investment. If you put some principal into your traditional 401(k) plan, your taxable income gets reduced, as you would need to meet the purpose of federal income taxes.

Secondly, you need to accept your boss’ matching contribution. It might be different in every company.

But in most firms, about 50% of the employee’s contribution finds a match level, even though there would be a cap on your salary.

Hence, if you have contributed $1,000 to your 401(k) plan, you get back $500 as your employer’s contribution.

So if you put in some investment capital, the company’s matching amount can be that much more cheering. The investment for you would total $1500.

Finally, the even more gladdening news is that if you lower the starting point for your income.

The taxes too come down in comparison to whatever they would have been if you had not put in some sum to the 401(k).

For those of you who belong to the 25% marginal tax bracket, you get a quarter of the sum that you contribute throughout the years.

So do you see the good loop in this? While you pay your taxes like a good citizen, your contribution of $1000 is already not included as a taxable wage amount.

And if you are part of the 25% tax marginal tax bracket, you can automatically save yourself $250. So your $1,500 that came attached with the 401(k) actually cost just $750. Then a penny a day doubled for a year.

Penny a Day Doubled for A Year Summary

There is a lot more you can do now. You can put in your 401(k) funds to actually invest in mutual funds or exchange-traded funds.

One alternative that can help you would be less expensive investments in stocks, such as S&P Depository Receipts. This would help to track the S&P 500 index, which is part of the 500 largest publicly traded U.S. companies.

Its expense ratio would by a miniscule 0.09% expense. Hence, the Exchange Traded Fund as well as a number of S&P 500 index trackers help to get you good access and perception of the US markets.

Doesn’t that make you pile up your nest egg quickly?

Apart from stocks, you can invest in short-term assets that are more solid and certain. You would definitely be giving up the bigger potential of stocks, yet you can be assured that you get the money at the end of the investment.

Try out Vanguard’s Short Term Bond ETF that invests in government bonds. The period that it takes to mature might be one to five years.

There is an expense ratio of 0.09%. Now the yield is only 1.12%, yet the risks are low. So you can feel safe about how a penny a day doubled for a year.

How does all that sound with the clink of your first penny – or cent? Definitely, you would no longer look down on your humble coin, but rest assured that a penny a day doubled for a year can really be great music.

Related: 401a vs 401k, Cash Personal Check

Category: Wallet Hacks

FAQ

How much is one penny doubled every day for 30 days?

A penny doubled every day for 30 days is $5,368,709.12. The article explains in detail how to calculate this amount correctly.

How much is 1 penny a day doubled for 1 year?

A penny a day doubled for 1 year is $375,766,813,243,813,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000,000.00 We show you how to calculate the amount and explain the role of compounding.

About the author: Alexander is the founder of daytradingz.com and has 20 years of experience in the financial markets. He aims to make trading and investing easy to understand for everybody and has been quoted on Benzinga, Business Insider, Investors Business Daily, Newsweek, GOBankingRates, capital.com, investing.com and other top financial publications.