I'm currently devouring Atomic Habits by James Clear and I'm struck by the awesome power of compound growth.
This is a concept, which I have been intimately familiar with for many years, primarily in the context of wealth creation.
Albert Einstein famously remarked that “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
I have always viewed compound growth, through the lens of inputs and outputs. The desired output has been the attainment of significant wealth, whilst the input has been the generation of revenue, which is then channelled into sound investments that produce high returns.
After 15 years, I now realise that I have failed to appreciate the true magic of compound growth, which is to be found not in the outcome, but rather in the process itself.
Another concept, which I've paid great attention to, over the past 15 years, is the establishment and attainment of SMART goals.
Much like the way I thought about compound growth, I have been mistakenly focussed on desired outcomes, rather than the repeatable systems needed to achieve them and even more importantly, the underlying belief systems, which account for my personal identity and character.
So let's disregard desired outcomes and focus our attention on the underlying processes and systems, which power the engine and move the needle.
If we form good habits, which allow us to make a 1% improvement each day, every day for an entire year, we will find that we are 36X better at the end of the year, than we were at the start.
By focussing on building a great system of daily habits, we can dispense with the notion of setting goals, on the basis that, as a by-product of moving the needle each day, we will eventually surpass any goals that we set for ourselves.
Indeed, the simple act of setting goals, will, in all probability, result in us setting our sights too low and cultivate an environment, in which we feel unfulfilled, until such time, as we can enjoy a fleeting moment of happiness when the goals are accomplished.
By reducing the scope of our approach, to days, rather than weeks, months or years, we will enjoy the feeling of accomplishment, on a far more regular basis. This, in turn, will allow us to quickly cultivate a profound sense of positive momentum, along with a cadence that sets us on an extremely powerful and exciting trajectory.
So what is it exactly, which fills the void between inputs and outputs?
A well constructed system of positive habits, is certainly a big part of it, but I can't help feeling there is a higher force at play here.
The thing, which I feel we should be deeply focussed on, is our trajectory.
According to the Cambridge Dictionary, the word trajectory is defined as "the curved path that an object follows after it has been thrown or shot into the air."
Compound growth is often expressed in the form of a curve, which starts out very flat, before gradually starting to rise and eventually spiking up, at an extremely quick pace.
By establishing a strong system of habits, which allow us to move the needle on a daily basis, we will accelerate the pace at which we move through the compound growth curve. Before we know it, we will have surpassed any goals that we would have set ourselves.
In the immortal words of Benjamin Franklin, "Watch the pennies and the dollars will take care of themselves."
Such is the power of forming great habits and consistently moving the needle.
What habits could you establish today, which will allow you to immediately alter the trajectory of your health, wealth and happiness?
Don't look backwards. Don't look forwards. Don't overthink it.
Start today and focus all your energy on moving the needle.
The future will take care of itself!
This is a concept, which I have been intimately familiar with for many years, primarily in the context of wealth creation.
Albert Einstein famously remarked that “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
I have always viewed compound growth, through the lens of inputs and outputs. The desired output has been the attainment of significant wealth, whilst the input has been the generation of revenue, which is then channelled into sound investments that produce high returns.
After 15 years, I now realise that I have failed to appreciate the true magic of compound growth, which is to be found not in the outcome, but rather in the process itself.
Another concept, which I've paid great attention to, over the past 15 years, is the establishment and attainment of SMART goals.
Much like the way I thought about compound growth, I have been mistakenly focussed on desired outcomes, rather than the repeatable systems needed to achieve them and even more importantly, the underlying belief systems, which account for my personal identity and character.
So let's disregard desired outcomes and focus our attention on the underlying processes and systems, which power the engine and move the needle.
If we form good habits, which allow us to make a 1% improvement each day, every day for an entire year, we will find that we are 36X better at the end of the year, than we were at the start.
By focussing on building a great system of daily habits, we can dispense with the notion of setting goals, on the basis that, as a by-product of moving the needle each day, we will eventually surpass any goals that we set for ourselves.
Indeed, the simple act of setting goals, will, in all probability, result in us setting our sights too low and cultivate an environment, in which we feel unfulfilled, until such time, as we can enjoy a fleeting moment of happiness when the goals are accomplished.
By reducing the scope of our approach, to days, rather than weeks, months or years, we will enjoy the feeling of accomplishment, on a far more regular basis. This, in turn, will allow us to quickly cultivate a profound sense of positive momentum, along with a cadence that sets us on an extremely powerful and exciting trajectory.
So what is it exactly, which fills the void between inputs and outputs?
A well constructed system of positive habits, is certainly a big part of it, but I can't help feeling there is a higher force at play here.
The thing, which I feel we should be deeply focussed on, is our trajectory.
According to the Cambridge Dictionary, the word trajectory is defined as "the curved path that an object follows after it has been thrown or shot into the air."
Compound growth is often expressed in the form of a curve, which starts out very flat, before gradually starting to rise and eventually spiking up, at an extremely quick pace.
By establishing a strong system of habits, which allow us to move the needle on a daily basis, we will accelerate the pace at which we move through the compound growth curve. Before we know it, we will have surpassed any goals that we would have set ourselves.
In the immortal words of Benjamin Franklin, "Watch the pennies and the dollars will take care of themselves."
Such is the power of forming great habits and consistently moving the needle.
What habits could you establish today, which will allow you to immediately alter the trajectory of your health, wealth and happiness?
Don't look backwards. Don't look forwards. Don't overthink it.
Start today and focus all your energy on moving the needle.
The future will take care of itself!