Death, Taxes, and Compounding

It is, indeed, a powerful force!  In the previous blog, we talked about the magic and the power of compounding and saw how compounding can have a significant positive effect in our lives.  Compounding is a great thing, right?  Well, it depends.

The principal of compounding will occur in our lives when we choose to apply it to something positive.  Here’s the alarming aspect about compounding that we may not be aware of:  compounding will occur in our lives whether we actively peruse it or not.  The choice we are responsible for is whether we will shape and direct the compounding in our lives, or whether we’ll allow negative compounding to occur, yielding results we may not want or desire.

Last post we talked about the compounding that occurs from lifting weight on a consistent basis day after day, for several years.  Let’s take an opposite scenario.  Say a person isn’t pursuing a healthy lifestyle.  Suppose they eat their favorite fast foods for lunch every day, and drink large quantities of unhealthy, high sugar or high calorie beverages.  Let’s also imagine that at the end of every day our “compounding unaware” example plops down in front of the TV for several hours until they drift off to sleep.  What effect will this have on a person after 1 day?  I’d say very little to none.  What happens when we add compounding into the equation?  What happens when our example strings several weeks of this consistent behavior together?  Let’s carry the equation out even further and say this behavior continues consistently for 5 to 10 years.  My guess is that these results are far different from the person who started lifting the 10lb weight 5 to 10 years ago.

Here’s the truth about compounding that is so important to grasp:  compounding will occur in our lives whether we actively choose to harness its power or not.  Our consistent actions, whether positive or negative, will yield significant results in our lives.  It doesn’t matter if we’re aware of the principal or not.  Compounding will occur regardless.

This principal gives us tremendous opportunity, but I also think it comes with tremendous responsibility.  Knowing that compounding will occur, we should cause something to happen that will allow compounding’s power to move us in a positive direction, toward the goals and dreams we have to change our lives for the better.  Why waste this principal’s precious power on results that don’t enhance our lives?

If you’re interested in learning more about compounding and how it can be applied in your own life, I highly recommend Darren Hardy’s excellent book, “The Compound Effect”.  Check it out and learn more about this under-utilized principle and begin applying its power in your life.  It will motivate you to stay consistent and encourage you to be committed to positive compounding for the long haul.

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