Improving 1% every day for a year will lead to a total of 37 times improvement in just a year! Wherever your current situation, if you want to become a better version of yourself, there might be a giant gap.
In order to bridge the gap between who you are and who you want to be you can accelerate this progress with compounding. First, we’ll look at what compounding is. After that, we’ll see how it applies to personal growth. Finally, we’ll understand that showing up consistently will get you rewarded.
“Compounding interest is the eighth wonder of the world. He who understands it earns it… he who doesn’t… pays it.” - Albert Einstein. Compounding is usually referenced when talking about financials. Where money compounds, usually at 7% a year, so if you had invested $100 60-years ago and annually made a return of 7% you’d today have $5,794. Say instead you managed to get an 8% return a year, then your initial $100 would be worth $10,125. As you can see a tiny 1% increase managed to get twice the return in the same period. Warren Buffet, the famous investor, has managed to get, on average, around 15% return year on year. With your initial $100 60-years ago compounded at 15% would be worth $438,400 today.
Here’s a secret that a lot of people don’t understand with compounding. Compounding doesn’t just apply to money. It applies to everything, including time and knowledge. That also includes your personal growth. If you improve how you do something you’ll be collecting the dividend, not just monetarily but also in your health, well-being, progress, and any other part of your life.
One thing to keep in mind with compounding is that it takes time. 1% compounded daily for 50-days will be 64% better. But the problem is that our memories are fallible. Which makes correlating progress to a specific action hard. So it’s important to not forget that certain actions from the past are what got us here and we don’t want to stop doing them. Because if we stop doing what got us here in the first place you stop the compounding.
Show up every day. Make sure to stay consistent, even if it’s just in a tiny manner because compounding will reward you within time. But don’t forget the actions that got you to your destination once you reach it. My hope is that my posts will help you become a better version of yourself and aid in your life journey of compounding and improvement.