The Power of Compounding – 5 Steps to Changing Your Life

CompoundingAbout six months ago, I had just started trying to learn Spanish for the fifth time around. I was spending roughly an hour each day studying, and I was killing myself with verbs, vocabulary and grammar.

But no matter how hard I studied, I didn’t seem to get the results I wanted. I didn’t seem to understand any more of the spoken language, and I was no closer to being able to read Spanish articles.

In the past, this would have been enough to make me quit. I would have been frustrated with the lack of immediate results, and would have thrown the books out the window.

But this time, I was determined to reach fluency, and quitting was not an option.

Did I care that I was seeing no immediate results? No. I knew I probably wouldn’t see any outstanding results for months. But I did know that my efforts would build up through compounding, until one day I would have achieved my goal of being trilingual.

And lo and behold; it worked!

The reason I was able to succeed this time around was, at least partly, because I had internalised the importance of compounding when trying to achieve a goal.

In the past, I had always expected quick results through a lot of hard work, which often resulted in disappointment. This time, however, I put in less effort spread out over a longer timeframe, letting my studying compound and produce much greater results over time.

The Power of Compounding

The concept of compounding is a simple one; you continuously make small efforts that build up to produce great results over time.

It is an incredibly powerful concept, and yet it is so often underestimated. We fail to see the great benefits of compounding, because it requires a long-term perspective on things. With a short-term perspective, it doesn’t matter if you do one workout at the gym. Nor does it matter if you go to the gym tomorrow as well. Two single workouts is nothing.

But if you continue to hit the gym consistently over the course of a full year, you will see some incredible benefits. Your continuous actions will have compounded and resulted in the reward of a healthy body.

Such is the power of compounding; even the smallest of changes today will build up and have a great impact in the future. A small habit of exercise will get you into shape. A habit of writing on a daily basis will produce several books per year. And a habit of personal development will drastically improve the quality of your life.

This principle of compounding could be applied on all areas of life. Whatever your goal is, a slight change in your daily life and enough time will get you there.

Using Compounding to Improve Your Life

So many people fail to make use of the concept of compounding. Their thinking is short-term, and so they never acquire the tiny habits that would one day result in great achievements. They never study a new language, they never make the one-time investment of learning about healthy eating, and they never take time to work on their finances.

Fortunately, it’s never too late to start receiving the benefits of compounding. Simply follow these 5 steps, and these benefits can be yours.

1. Realize That Time Will Pass Anyway

A common excuse to not make any changes to your daily life is that it would take too much time before you’d see any results. Well, that time is going to pass anyway, and five years from now you could be in a very different place depending on what choices you make today.

Sure, you may not see any results from your change of habit today or tomorrow – or maybe not even in the first year. But ten years from now, that time will have passed, and you will either remain exactly where you were before, or your efforts will have compounded to give you those results you were so eager to have.

So stop being in such a hurry for results! Realize that the time will pass anyway, and even the smallest of changes today will have enormous consequences in the future.

2. Compare the Short-term Sacrifice to the Long-term Gains

When it comes down to it, compounding is basically a question of making tiny short-term sacrifices in the present in exchange for major long-term gain in the future. What’s putting most people off, however, is that they fail to compare the two. It’s easy to overlook the long-term benefits and focus solely on the sacrifices you would have to make right now.

But by comparing the long-term effects and the short-term losses, you will see that the former will most likely outweigh the latter. Because what are you really losing by putting aside 30 minutes a day to study a new language? Compare this minor loss to the benefit of being bilingual within a year, and it becomes an easy choice.

Always keep in mind the long-term gains of your short-term sacrifices.

3. Take Small, but Consistent Action

Your efforts don’t need to be huge to achieve great results. Through the power of compounding, even the smallest of habits will build up over time. All you have to do is make a slight tweak in your direction, and you will end up in a completely different place.

For instance, simply by acquiring the habit of always taking the stairs over escalators, you would see huge health benefits 10 years down the line. The action itself is so tiny, it will hardly affect your life. But through compounding, it will gradually build up and change your future.

Stop procrastinating – take the tiniest of steps today!

4. Visualize What Your Habits Would Amount to

Where would you be in 5 years if you started practicing the guitar every day? What about 10 years? Where would you be today if you had made that change 5 years ago?

If you view your life in such a large timeframe, the effects of compounding will become clear. Chances are you will end up somewhere very different in 20 years if you start exercising daily, versus if you keep munching down a bag of chips every night. And if you had chosen to write a single page every day 5 years ago, you would have written 1825 pages by now – enough to fill several books!

Think about where your habits will take you, and it will be so much easier to implement them.

5. Take Your Time – Focus on Making the Habits Stick

We all want to see results as fast as possible. That’s why most people make the mistake of trying to change their entire life all at once. Unfortunately, this rarely works; The more habits you try to implement at once, the harder it will be to stick with any of them. It will just overwhelm you.

You won’t see any benefit from trying five new habits for a week and then dropping them all. Focus on one at a time, and make it stick – then you can move on to add more habits!


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