Now is it a great time to reflect on your life and find ways to improve upon it. Why not try to live the best life you can? One way to live your best life is using the power of compounding. When you take small steps consistently they can make lasting change that grows exponentially. One change stacks on top of another and still another. Let’s look at how compounding your life can really pay off.
Compound Your Finances
Would you rather have a penny that doubles every day for a month of $1 million? Sounds like a trick question right, of course the million dollars! Well, if you choose the penny, by day 30 you would have $5, 368,709.12! That is the power of compound interest! Doubling that penny starts off slow and you have just over a quarter after 4 days, but then continuing to double those pennies every day will result in a snowball of money that keeps growing each day. Sure, there’s probably no raja nearby that you can make this deal with (did you follow the first link?) but your next best bet is to save and invest. Socking away today’s pennies at 8% interest (a fairly conservative investment rate, depending on what you are investing in) means that every 9 years your money doubles. So how much you have at retirement really depends moe on giving it plenty of time to double and then double again and again than on how much you put in to begin with. Investing $3000 at age 25 and doubling it every 9 years means that 36 years later you will have turned that initial investment into $48,000! And that assumes that you didn’t add anything else into your savings over those 36 years. The same is true with college savings. If you invest small amount for the first few years of your child’s life, you will be able to let that money compound and grow without having to continue to aggressively save for 18 years. Let compounding work in your favor!
Compound Your Health
Habits are best made small because small changes are easier to incorporate continuously into your day to day life. Once you have gotten used to one healthy exercise habit, then add in more to compound those habits. Start by walking an extra few blocks with your dog every day. Then start running one day a week. Then add in weight training. Pretty soon you find that you are exercising just about daily without even thinking about it because you are compounding your healthy exercise habits and you are just so used to being active. Losing weight slowly will result in lasting change. It’s better for your body and you are more likely to keep it off then starting with some. Perhaps start by incorporating a vegetable or fruit into every meal. Then increase the number of fruit and veggie servings per day. Slowly making changes allows our bodies and brains to reset our status quo and once we have a new baseline we can add to that baseline, compounding the positive changes.
Compound Your Learning
Learning from books and through experiences build on each other to give you a compounded educational experience. Reading about the grand canyon and then traveling there have the effect of searing new knowledge into your brain. Learning from both books and experiences both take time and both independently should be used to grow our minds. But when you compound an experience with a deeper book-knowledge well (like reading child development books and then working with your children in a developmentally appropriate way), you can gain a deeper understanding of the application of the knowledge you have learned. The best way to learn is by doing and it will help you to make smarter, and better informed decisions in the future because you will not only have the head knowledge but you will also have the coupling experience to go along with it.
Compound Your Relationships
It is way too easy to get caught up in “adulting” and forget that you need friendships just as much as you did as a kid. Sure, you probably have your own kids by now but they cannot be your only friends. Nor can you focus solely on your work or on your spouse. Too much attention on one thing in your life or one relationship can smother it and extinguish that flame. Instead, try to focus on opening your heart to people and compounding your relationship experiences. Spending time with old friends or making new friends can open your heart to sympathizing with your children’s friendship struggles and help you parent better. Engaging with and meeting new people can enrich and compound the current relationships in your life by adding new perspectives and experiences that you can draw from. And it allows you to give breathing room to relationships that need it and forces you to step outside your comfort zone, be vulnerable, meet new people, and grow as a person yourself. The closer you are to more people, the more fulfilled your life will be.
Compounding everything in your life can result with you richer in finances, health, education, and friendships. Taking small steps and making small changes will set you up with a new normal baseline, then continue to add onto those changes to build better habits without noticing it too much. Trying to change everything all at once usually results in getting overwhelmed and quitting, but starting small is the key to lasting change.
