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The Power of Compounding: Beyond Dollars and Cents


About 12 years ago, I walked into an economics class and learned about this magical thing called "compound interest."

At first, it seemed like a cheat code. Sure, the initial ramp was small, but once it started gaining momentum, growth went crazy

For example: A penny doubling every day for 15 days is worth $163.84. But if it keeps doubling for 30 days, it's worth $5,368,709.12!

My biggest takeaway? I needed to invest as young as possible so I could get to that tail and watch it grow.

What I didn't realize at the time is that compound interest applies beyond money. Imagine your habits as a bank account: with each positive choice you make, you’re making a deposit into your future self.

For example:

  • Nutrition: Let's say the calorie difference between a healthy meal and a non-healthy meal is 250 calories. If you swapped that meal out for 6 months, you would reduce your calories by 45,000 calories—roughly equivalent to 12 pounds of fat!
  • Relationships: If you call a friend or family member twice a week for a brief catch-up, after 6 months, you'll have over 50 conversations. That’s 50 opportunities to strengthen your bond, provide support, and create lasting memories.
  • Reading: If you commit to reading 10 pages a day, in 6 months, you'll have read 1,800 pages or about 6-8 full-length books.

It’s not just money that compounds—our habits do, too!

So, how do we harness this compounding effect in our daily lives?

  1. Start Small: Just as you wouldn’t deposit a large sum into your bank account all at once, you don’t need to overhaul your life in a day. Start with small, manageable habits. Commit to a daily five-minute walk or drink one extra glass of water.
  2. Be Consistent: Consistency is key. The power of habits lies in their regularity. By repeating these small actions, you create neural pathways that make these behaviors easier over time.
  3. Track Your Progress: Just as you check your bank balance, keep an eye on your habit deposits. Journaling or using habit-tracking apps can provide insight into your progress, motivate you to continue, and help you celebrate your wins, no matter how small.

And remember, habits work both ways. Just as we can make withdrawals from our bank accounts, we can also fall into negative habits that deplete our growth. These can include excessive screen time, unhealthy eating, or negative self-talk. Recognizing these withdrawals is crucial.

Habits can change everything. They are our most powerful asset. By making small, consistent deposits into our personal growth bank account, we can achieve exponential growth.

Favorite Photo from the Week:

Happy Halloween from Alice, The Queen of Hearts, and the Mad Hatter!

Till next week, be kind, be curious and work hard.

Tanner


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