You have probably heard the word compound if you ever had to deal with banking, savings accounts especially. There are two ways to save money: savings with the compound interest or simple saving interest. When you put your money using compound method it means that you will gain money even on the interested you earned! Today I want to write about the compound effect in other areas than the bank saving account.
It is the principle of reaping huge rewards from a series of small, smart choices. What I mean by that is that all the choices you make will compound, add up to something huge in the long term. The compound effect always works, so you should become more aware of what small actions are you doing for the most of the time. Are they good? Or maybe they could be improved? All you need to do is to grasp the compound effect and learn how to make it work for you in a positive way.
It might be a little hard to understand so let me give you an example (remember this can be used in all areas of your life and not just in money):
Let’s say you love your daily coffee which costs you £2.5. Now times that 5 days a week. It becomes £12.5. Times that by 4 weeks in a month, that’s £50. Now times that by 12 months and you would get an astonishing £600! It might seem that £2.5 is nothing at a time but if you would look at it on the grand scale, the compound effect works and it all adds up to a bigger thing.
The compound effect can work for you in a positive way too! And it is not just about money. Let’s see a similar example using book reading. A person who does not read at all will end up with 0 pages in a year (duh). But a person who decides to read as little as 15 pages a day will have read 5475 pages! An average book is only 250 pages, that leads us to a whopping 21 books a year!
Let’s say you are not into reading, okay, but you can still use the compound effect in other areas of your life. Physical activity, relationships, work, school or even monetary things can be adjusted using this effect. All you have to do is identify what you want and begin to take small actions consistently to move towards your goal.
By doing little things constantly we create habits that control our future. You do not have to be a hero who saved the day or to complete massive achievements in a day, all you have to do is constantly complete loads of small steps to become a great winner.
As you now know, the compound effect is a very real thing. If you decided to try and change some of your habits for good, it will greatly reward you. Just remember it does take a long time, so do not rush and do not expect instant results. Be the tortoise, not the hare. Move slow and steady towards your goals while doing small things consistently.
I have recently read a book that goes deeply into explaining The compound effect. It is very useful as it tells you how to actually recognise your behaviour and how to change it, so if any of you are interested in learning more about this topic I would definitely recommend buying it on Amazon.