My Compounding Effect

Dear lovely people,

For sure, many are those who languish in pain and complain of not making it after years and years of effort. Here are my series of often unanswered questions: what is the packaging of your efforts? Is it consistent? Is it correctional over time? Is it improving on previous efforts? Is it compounding the results of earlier efforts?

Failure will be consistent in your life if you keep doing the same things in the same way you have done over the years and that yielded no positive results. “You will never change your life until you change something you do daily. The secret of your success is found in your daily routine.” ― Darren Hardy.

You might have heard about the compounding effect. Compounding is the ability of an asset to generate earnings, which are then reinvested in order to generate their own earnings. In other words, compounding refers to generating earnings from previous earnings. Many are those who refer to the concept of compounding as pure magic because it is one of the most fundamental ways to build wealth, yet takes the least amount of effort. Given time, earning interest on interest can exponentially grow wealth. Let me demonstrate this:

Suppose you invest $1,000 into BoldTrades Inc. The first year, the shares rises 20%. Your investment is now worth $1,200. Based on good performance, you hold the stock. In Year 2, the shares appreciate another 20%. Therefore, your $1,200 grows to $1,440. Rather than your shares appreciating an additional $200 (20%) like they did in the first year, they appreciate an additional $240, because the $200 you gained in the first year grew by 20% too. If you extrapolate the process out, the numbers can start to get very big as your previous earnings start to provide returns. In fact, $1,000 invested at 20% annually for 25 years would grow to nearly $30,000 (and that's without adding any money to the investment)!

Consider your plans for a better life and the efforts you are investing into those plans to actually transform them into positive reality. What if you started compounding the little results you are getting, capitalizing on them, and reinvesting them over time? Then you will not be complaining of the economy again, you will not be dwelling on why you are not making progress because you will clearly see how each small success you register consistently adds up to unbelievable wealth and success.

Something you might not know, I’m living proof that consistency is the ultimate key to success, yet it’s one of the biggest pitfalls for people struggling to achieve. Most people don’t know how to sustain it. I do. I have my father to thank for that. In essence, he was my first coach for igniting the power of the Compound Effect in me. You can too and as a matter of fact, you can do even better if you start today. Start NOW.

Darren Hardy continues today that “It's not the big things that add up in the end; it's the hundreds, thousands, or millions of little things that separate the ordinary from the extraordinary.”