Compound interest is one of the most important concept of finance today and understanding the power of compound learning on the subject of money and life can make all the difference of being a successful and very successful person. In Finance, compound interest is calculated on the principle amount and on the accumulated interest of the previous time periods. Thus it is regarded as ” Interest on Interest “. This means small amount invested today that gets compounded over time earn a lot more in the long run than the large amounts compounded for a less time frame.
I would like to make an argument that the learning process work in exactly the same way in life than that work in finances. An Idea is just a thought that crosses our mind which is one out of 60,000 thoughts that visits it daily. If we take an idea and plant it, not just in our mind but in the real operation of business, it will start to grow. What seems like an insignificant seed today will eventually look into a healthy tree in few years time and a huge towering oak tree in 10 or 20 years.
Let us imagine that you come to me and say ,” Hey, I am going to read about a new and interesting topic every day for 30 minutes”. Great. Do we expect a different between your understanding of the world and mine tomorrow ? Probably not.
Day after? Again, probably not.
But what about a year from now? Sure, there is likely to be difference thanks to the accumulated knowledge of 10,950 minutes of reading.
What about 10 years from now? Now, there is certainly be a difference as you may have clocked 109, 500 minutes of reading.
Then what about 30 years?
Little action carried over consistently for a longer period of time have tremendous power and great insight that can really shape of who you can become with right amount of discipline be your constant parallel thing in your journey. You and I know that. As you move forward with your consistent learning of mix subjects like art, management, photography, psychology, leadership and self help; you soon begin to realize that all subject are interrelated and your knowledge increases with the deep understanding of the subjects. Wisdom will surely be the excerpt of your understanding which will help you to know what to do with your knowledge in daily context of life. Knowing that it is one thing to be knowledgeable but it quite another to be wise.
Another powerful example of compounded learning is the rise of great american business magnate and investor Warren Buffet. When once asked on the live TV by a journalist as how to get smarter, Buffet held up a stacks of paper and said, ” Read 500 pages like this every day. That’s how knowledge works. Its builds up like compound interest. All of you can do it but I guarantee not many of you will do it “
Now to understand, how can we really shape our thinking and expand our knowledge on every day topics; to have a desire to learn. It’s an exercise in both motivation and incentive, that learning is what helps in expanding our mental capacity and potential while simultaneously believing that it will pay long term dividend in life. Fast forwarding with the same zeal and enthusiasm , motivation to learn becomes your default setting. You wake up and think, ” I am open and excited to learn good thing today “.
“It’s not how smart you are that matters, what really counts is how you are smart.” ~ Howard Gardner
Every single day, we have a choice, both with money and with learning, to use the power of compounding or not. Not being aware of the choice is not an excuse. And, not choose is, really, choosing.