Menu
LMM
Life
The Power of Compound Interest
- Bookmark this site. You Have Found The #1 Self-Improvement Resource On The Internet.
From the desk of Harsh Strongman
Subj: The Power and Math of Compounding
This article is about the greatest force known to man: Compound Interest.
Simply put – compound interest means that returns accrue on principalas well as previous returns.This sounds like a very minor detail – but as you’ll see – it’s not.
The geometric return adds up FAST.
Take a look at this table:
In the first year, the additional return generated due to compounding is very little – just $6.58.
By the time the 10th year is up – the simple interest portfolio is now worth a measly$460, while the compound interest portfolio is worth an impressive$3471.10 – amassive654.6% difference.
That is the power of compound interest.
A graphical representation will showpreciselyhow exponential the difference is:
Now that we have the math out of the way let’s focus on the application aspect of the game.
Compound Interest applies to EVERYTHING
Everything – money, relationships, health – everything.
The gains in one aspect of your life will compound into other areas of your life.
If you work on your health – it will improve your body – which will improve your personality – which will improve your relationships – improved relationships improve your social and professional network – which in turn improve your cash flows – the extra money frees up time – which can be used to network / build another business / or be spent in the gym – and the cycle goes on.
If you’re smart and understood the above paragraph – you’ll see that the cycle can start at any point you pick.
You can start with building on relationships and it will compound into your health.
Small improvements in any facet of life will compound with or spill into another.
To gainmaximum advantage of this process – we recommend making small improvementsdailyinto at least three significant aspects of life. This could be money, love, networking, family, health, your children, business, etc.
The key here isconsistency– small daily effort is muchmuchbetter than sporadic large effort because sporadic effort can’t compound on anything.
Your health won’t improve much if you do 300 squats once a month. But 10 squats a day for 30 days – you will see the strength compound on itself, even though the total number of squats is the same.
Compound interest can bereal troubletoo – especially negative habits that are iterated every day. One day of eating junk food, and getting no exercise does no major harm. A month of the same will compound on itself and will cause some severe damage.
It is up to you to make sure that the interest rate is positive because everything is always compounding.
Your decisions on what you eat, how much (or little) you exercise, how much time you spend (or don’t spend) in building your businesses, and how much (or little) you network – are compounding continuously, whether you like it or not.
Whether you spiral up or spiral down – is totally up to you.
If you are stagnant, or worse, spiraling down, woe is you, because someone is out there, rapidly spiraling up, ready and prepared to kick your ass.
An interesting observation:
The greatest example of compounding is the human race itself.
From the stone age and hunting for nourishment to the bronze age to the iron age and agriculture and rearing animals for food, it has always taken lesser and lesser time to move on to bigger and better things.
200 years ago nobody knew what an electron was, and now there are electronics everywhere – you’re reading this article with the help of one.
From barter to Bitcoin – compounding is the greatest force in the world.
You may also like
Buy 1 Bitcoin While You Still Can
Types of Sources of Income: A Broad Overview
Drop Friends Who Disrespect You
Follow us
12.8kMembers
25k+Subscribers
MailerLite
AFFILIATE DISCLOSURE
Some links to products contain affiliate links. If you make a purchase after clicking a link, I may receive a commission. For an example, as an Amazon Associate I earn from qualifying purchases. This commission comes at no additional cost to you.
Top 10 Popular Articles
- Life Advice for 18 Year Olds (19 Lessons for Teenagers and Young Men)
- How to Increase Protein in Indian Vegetarian Diet (With Desi Diet Plan)
- Dokkodo (21 Precepts on Self-Discipline) by Miyamoto Musashi
- Skills to Pursue to Set Yourself Up for the 2020s and Beyond
- 6 Main Reasons Why You’re NOT Gaining Muscle (With Solutions)
- Don’t Talk to Men and Women the Same Way
- What to Do When People Treat You Badly?
- 50 Lessons For Men in Their 20s
- “I Want to Start a Business but I Have No Ideas”. Read This.
- What is it Like to Be a 30 Year Old Unmarried Woman? (7 Women Answer)
Related Articles
Are All the Sacrifices Worth It?
Live Life on Your Own Terms: Dealing with People Who “disapprove” Part 1
Arguing Is a Waste of Time
Appreciate The Simple Things in Life (What I Learned From a Small Mountain Village)
Why You Should Never Get Into a Street Fight
You Get What You Deserve and You Are Where You Deserve to Be
Top 10 Popular Articles
- Life Advice for 18 Year Olds (19 Lessons for Teenagers and Young Men)
- How to Increase Protein in Indian Vegetarian Diet (With Desi Diet Plan)
- Dokkodo (21 Precepts on Self-Discipline) by Miyamoto Musashi
- Skills to Pursue to Set Yourself Up for the 2020s and Beyond
- 6 Main Reasons Why You’re NOT Gaining Muscle (With Solutions)
- Don’t Talk to Men and Women the Same Way
- What to Do When People Treat You Badly?
- 50 Lessons For Men in Their 20s
- “I Want to Start a Business but I Have No Ideas”. Read This.
- What is it Like to Be a 30 Year Old Unmarried Woman? (7 Women Answer)
AFFILIATE DISCLOSURE
Some links to products contain affiliate links. If you make a purchase after clicking a link, I may receive a commission. For an example, as an Amazon Associate I earn from qualifying purchases. This commission comes at no additional cost to you.
© 2024 – Life Math Money. All Rights Reserved.
© 2024 – Life Math Money. All Rights Reserved.
- AFFILIATE PROGRAM
- AFFILIATE DISCLOSURE
- PRIVACY POLICY
- MEDICAL DISCLAIMER
- SITE-WIDE DISCLAIMER
