Welcome to G.R.O.W (Getting Richer on Wednesdays) Weekly! Every Wednesday, you will receive an email with a new topic designed to help you GROW.
For this week, I’ll be discussing the secret to achieving growth in any aspect of your life (personal, professional, investing, etc.).
It’s actually a very simple concept that anyone can start applying to their lives today and begin seeing the results. People have been using it throughout history to accomplish some of the most influential things in our lives.
Alber Einstein even referred to it as the 8th wonder of the world.
It’s called:
Compounding
When it comes to building wealth, compounding is THE way to do it.
What is compounding?
Compounding is when your initial investment earns interest on top of the profits it has already produced. Or, as Benjamin Franklin put it" “Money makes money. And the money that money makes, makes money.”
And that’s why he earned a spot on the 100 dollar bill.
Think about it this way - If you invest $1,000 and earn 12% interest, you now have $1,120. You earn an additional 12% interest on top of that in the following period, and your total is up to $1,254.40.
You get the idea. Money multiplies much faster when it is earning compound interest.
How to Use It to Your Advantage
This is what really matters. How you apply it to your life.
You can apply compounding to other situations in your life, not just your finances.
Take for example, getting into shape. If your goal is to get into shape, you can start by putting in the initial effort, like going to the gym.
After going, you feel better about yourself and decide you want to go back. After going to the gym a few times, you begin to see progress, which motivates you even more, so you keep going back.
If you stick with it, you will notice your results begin to compound. You see yourself getting fitter and fitter each time, which gives you the motivation to return.
The secret is sticking with it.
If you can stick with something, even when you feel like you don’t want to, that’s where the magic happens.
James Clear, the author of Atomic Habits, has a great chart1 that looks like the one above, showing the power of improving by just 1% each day. If you haven’t had a chance to read his book yet, I highly recommend it.
He explains the power of making small progress and the giant impact it can have on your life.
You can purchase it HERE.
If you have a goal in mind right now, think about what you can do to get it started. Then, every day try to work towards your goal. Even if it’s something very little, it can add up over time to create something extraordinary.
If you enjoyed this post, please consider subscribing below, and I’ll see you next Wednesday!