Putting Compounding To Work

“Compound interest is the eighth wonder of the world. Those who understand it, earn it… those who don’t… pay it.”  ~ Albert Einstein

When we invest money, the interest we earn on that money also earns interest for us.  Over years of consistent investing, the interest-earning-interest can wind up being a significant sum.  While we might not see big results right away, the impact of compounding will soon become significant. This is the concept of compounding interest.

Here’s thing about compounding that most people don’t realize… it’s just as effective in other areas of life beyond finance.

The healthy habits we intentionally develop, and continue to practice year over year, yield desired results.

  • A healthy diet yields good health
  • Healthy spending habits yield control over your finances
  • Healthy saving and investing habits yield financial freedom
  • Continuous learning exposes you to new ideas and fresh perspectives

Here’s one more thing most people may not realize about compounding… it can also work against you.  Compounding is not limited to yielding increasingly good results.  Our bad habits, practiced year over year, can unintentionally yield undesirable results.

  • A bad diet yields poor health
  • Poor spending habits yields a consistent lack of money and debt
  • Failure to save and invest yields financial insecurity and potentially poverty
  • Deciding not to learn lead to becoming stagnant, outdated, and irrelevant

The most important thing we can know about compounding is that it will do its work in our life whether we invite it to or not.  The most important thing we can do with regard to compounding it to make sure we’re putting it to work for us.

ACTION:  Develop and regularly practice the habits that will compound to bring you the results you seek.

Advertisements

Giving Attention

Here’s a quick mental exercise. See if you can think of an area of your life that gets better instead of worse as a result of being neglected. Here my attempt at a list and whether or not these areas get better when neglected:

  • Relationships – No
  • Health – No
  • Finances – No
  • Career – No
  • Family – No
  • Personal development – No
  • Possessions – No
  • Outlook on life – No
  • A garden of wild weed – Yes

Most areas of our life don’t get better as a result of neglect, they usually get worse. I know, that’s obvious, but here’s what may not be so obvious. While we may not intentionally decide to neglect an important area of our life, neglect is what happens when we fail to give something our attention.

To make something better, or to at least keep it good, requires our effort and attention. With so many things clamoring for our attention it’s essential that we purposefully give attention to those important areas of our life, lest they be unintentionally neglected.

A Post Election Reminder

The 2018 mid-term elections are over (thank goodness!). While I don’t know whether you’re happy with the results or not, I do want to make you aware of a very important person who is still in power… YOU.

YOU are the person with the power to create the life you desire. No political party, or person in office has more power to positively impact your life than YOU do.

So no matter who “won” politically as a result of the election, YOU still retain power over yourself and your choices.

Let’s use that power wisely.

The Responsibility of Imperfection

Here’s a piece of information I find liberating: None of us are perfect, nor are we expected to be. While I make an effort to do my best at whatever it is I’m doing, in my imperfection I often miss the mark, screw up, or fall short.

While knowing that I’m not perfect frees me up to try, fail and improve, knowing that I’m imperfect also reminds me that with imperfection comes responsibility. When we screw up or say the wrong thing, or a host of other things imperfect people do, we should be quick to:

  • Apologize to those we’ve hurt or negatively impacted
  • Own our mistakes instead of giving excuses or looking for someone else to blame
  • Ask for forgiveness when needed

We should also be quick to avoid expecting perfection from others and be equally quick to show grace to others when they fall short, because isn’t that what we’d like from others?

Let’s work at being responsible with our imperfections, and graceful to others in theirs.