Compounding
Notes
Claim
Some actions have exponential value over time, or they synergizes well with other actions. Instead of getting the same return when performing this action, you get higher returns the more you do it/keep on doing it Consistency compounds results through reliable repeated action, which is the opposite of Each additional unit provides progressively less value.
Explanation
Even if we Starting small reduces resistance and builds momentum for change, we can get meaningful returns later on. The only disadvantage is that it requires us to be patient, and at first the Initial effort investments create friction preventing optimal behavior change might be higher than the initial returns, or that it would seem that we get so little back which would make us question our behavior. Only once we cross the level of Change happens suddenly once a threshold is crossed, we would be able to see the huge return of our investment.
Compounding is not limited to a specific field. We can find examples in the financial world—compounding interest which usually revolves around savings, but also in the world of habits, such as keeping good habits which gets easier to do as time goes by Repeated actions become automatic through habit formation. So as long as we Focusing on process and consistency yields better results than obsessing over outcomes and maintain our current course, we can achieve something great.
Compounding can also be seen as a type of "positioning". While the benefits might not be daily, by working constantly towards your goals or optimal lifestyle you put yourself in a better position in life when opportunities arise. For example, being a hard worker will pay off when the boss will consider who to promote, or being a good friend will also be beneficial once you're in a crisis. Essentially, your hard work is not lost from day to day but stored each time.
Why it matters
Compounding also helps us avoid We prefer immediate benefits over delayed ones, because the expected returns are higher the sooner we start, so it's best to do it now rather than later.
Examples
For example, getting better 1% each day, you get 37 times better at the end of the year, while getting worse by 1% each day can also be very harmful:
1.01^365 = 37.78% 0.99^365 = 0.02%
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Overview
🔼Topic:: Compounding and Consistency Origin:: Atomic Habits (book) Origin:: Clear Thinking (book) 🔗Link::