The Compounding Effect

Back in high school we learned about compound interest. The way it worked is that after you deposit some money into your bank account,  it earns some interest at the end of every year. If you deposited 1000 ksh, at the end of the year, you get an extra 100 ksh with a 10% interest rate. While this may seem small, over time this amount of money will keep accumulating until after 10 or 20 years where it will double or triple the original amount.

The compounding effect works more or less like compound interest in the bank. For every task that you do consistently, you get better, or you gain more of that specific skill. If you are a dancer and you dance an hour a day, with time you will start to get better and this works for everything we do. Think about your first day on the job and how you are today, if you are a freelancer think about your first job and client and where you are now. Think about athletes’ who wake up every day to run getting ready for the Olympics, or a student at school who starts revising weeks before the exam a day at a time. These people, at the end of the day, get what they want and it happens because of the compounding effect.

The compounding effect implies that for whatever task you do, you will get better at it as long as you do it consistently. And this effect applies to everything we do. For me as a blogger, the compounding effect makes me a better blogger with each post I make. For the guy at the gym, the compounding effect makes him stronger and makes his muscles larger. It may not be obvious in the beginning but over time this effect delivers on whatever you invest in it.

The thing I found interesting about this effect is that it applies to anything that we do. Think about people with weight problems. First they started eating something unhealthy. The effects could not be seen then but over time as they indulged in their unhealthy eating habits, the fat content in their body compounded and now they want more than anything to lose weight. Think also about drug addicts. I don’t know of anyone who starts doing drugs with the intent of being an addict but it happens any way, why? Because for smokers, they started with one cigarette a week, then two, then three, then one cigarette a day until now a few months or years later, they need a pack to keep them going. The thing about this effect is that while it’s very significant in our lives, we rarely take the time to observe its changes and that’s why the changes catch us off guard, because they took place one small effect after another over a long period of time.

Now, with this in mind, can we use this effect to our advantage? Yes we can. A popular piece of advice given to those who want to be successful is start small. With the compounding effect, this advice works very well. Want to get fit? Instead of rushing for that gym membership, start with simple basic exercises. Start by walking every day, then start jogging, then do some basic exercises at home and in with time you will notice the difference. If you want to eat healthier, instead of changing everything all at once, start small. Start with a fruit before every meal then start taking out the foods you know are not good for you and with time you will be looking and feeling better. This effect works for anything you can think of including addictions, the only thing to note is that you have to be consistent for this to work. So for whatever you do or are doing, remember that this effect is in play. Put in the right set of actions and you will reap success at the end of your day.

Have a nice day 🙂