Drop by drop is the water pot filled. Likewise, the wise man gathering it little by little fills himself with good.
~Buddha
Compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.
~Einstein
In an age of overwhelm, we are drawn to productivity hacks and habits that promise the quick fix we’re searching for. Deep down, we know that all the ubiquitous buzzwords in the world won’t replace the need for consistent action.
Gaining clarity on the universal concept of compounding may be the balm we need.
The effect of compounding on money (given sufficient time) is undeniable. All finance nerds are enthralled with the concept of compounding, and it’s equally powerful when harnessed in other aspects of life.
The reverse compounding effect kicks in when things are neglected and rapidly deteriorate.
Last year, I was unable to tend to my yard and garden due to illness. It’s a small patch of land, but thanks to several weeks of neglect, it morphed into a jungle of weeds and dried up plants. This spring, I worked on getting it back into shape. While it’s going to take time, each day that I tackle the weeds and water the plants is another drop in the bucket, and eventually its former glory will be restored.
It’s all about doing the reps. In a culture that worships instant gratification, it’s counterintuitive to play the long game, but small daily practices add up, no matter what the pursuit.
Let’s look at the magic of the compound effect on various areas of life.
Relationships
When you consistently nurture your child with kind words, she is more likely to become a kind person. Weekly check-ins with a long-distance friend keeps your relationship alive. The daily time and attention you devote to your spouse maintains closeness. Building a loving bond with a rescue pet requires one gentle interaction after another. This stuff isn’t rocket science. We tend to think of the big bold gestures as what matters in relationships, but every moment counts.
Health
It’s not the next eating plan or exercise routine that’s finally going to solve your problems. Anything you do each day to eat healthfully or move your body more is going to propel you in the right direction. You’ll never dial in the perfect diet - but every day that you eat more green things and less packaged things, you’re telling your subconscious that your body is worth treating with respect, and eventually you’ll begin to believe it. Instead of giving up because you failed to dedicate an hour to the gym today, use hand weights at home for fifteen minutes. I have been a runner for almost twenty years, and though my days of training for half-marathons are behind me, running a few kilometres several times a week remains a cornerstone of my health regimen. Whatever type of movement energizes you, integrate it into your life in small regular doses.
Spiritual Growth
The compounding effect of daily meditation is undeniable. Whether your spiritual practice includes meditation or not, it will require on-going nurturing. If religion doesn’t speak to you, think in terms of your personal growth. Building character is a drop-by-drop endeavour. Perhaps, like me, you’d like to build your patience. Pick the longer check-out line, or go to the hospital lab for bloodwork without an appointment. Whatever area of personal growth you’d like to focus on, look for opportunities to practice. Character improves with consistent effort.
Finances
Besides the obvious growth of money through the reinvestment of interest and dividends, other aspects of financial life benefit from compounding. Simply paying attention to your income and outflows - building awareness around your habits - will help you implement positive changes. Tracking expenses is a useful tool if overspending is your nemesis. Instead of poking your head in the sand, keep on top of your obligations by doing a weekly review. Combat procrastination by facing hard things and tackling them one chunk at a time.
Career
Substack is a stellar example of how building consistently over time will eventually fill the bucket. Like most writers starting out, I sent my work into the void, never to be seen by anyone. With consistent output, week after week, I clawed my way toward a readership. I don’t expect instant anything in this realm, and I’m content with the hard work it takes to be seen. Prior to writing online, I journaled daily for years, and it continues to stoke the creative fire.
Achieving a beautiful life doesn’t require earth-shattering manoeuvres - just small drops in the bucket, day by day.
It’s the daily walks, the regular decluttering, and the few pages of reading a book each evening, that move the needle.
So many aspects of life, beyond money, can be enhanced by the incredible power of compounding. What do you intend to start multiplying in your life today?
If this work enriched your life even a smidge, would you considering giving a modest tip?
I’ve been thinking about old age and how compounding affects it so much! For good or bad.
My parents invested heavily in sitting, inaction, poor diets, and negative attitudes. They are now reaping their rewards.
I intend to do the same. Except I will compound exercise, nature activities, joyful food, and fantastic relationships. And my rewards will come.
Talks the talk and walks the walk. Always great words and a deep well of wisdom never comes without learning plenty of life's monumental lessons. It's great to know you're listening.