If I was to give you the gift of amazing wealth, power and knowledge; would you take it? Even though this offer sounds very similar to what an old snake oil salesman would spout, in this letter, I have written down some of the most impactful information I currently hold and am very excited to share it with you!
Compounding has an amazing multiplying effect on what you can achieve and accomplish over long periods of time. Bill Gates said once that “Most people overestimate what they can do in one year and underestimate what they can do in ten”. To explore compounding, the second half of this quote is particularly important, and as people go, Bill Gates isn’t a bad person to learn a few things from.
What I like about the quote is that it clearly lays out how by taking a longer-term view of your goals and hobbies, and doing things reliably for a long time, will allow you to achieve more with your chosen activity. Makes sense right?
Okay, so how exactly does compounding multiply the results of what you do?
We have to remember that while we do different activities, we usually become more skilled at them through the act of practice. Your skills don’t stand still! Depending on the activity or skill, your speed, efficiency or effectiveness will appreciate over time and contribute to greater results from the same levels of work in the future. This becomes a circular set of steps and compounds in the below way:
- Do action consistently over a long period of time.
- Get better through practice and eliminating weaknesses.
- Reach a new skill level where you can do the action better/faster/with more impact.
- Keep doing the action, but now at a better level.
And whether it’s learning to make amazing ice cream, improving your close relationships, earning money on investments or getting into debt, with practice, there is no limit to what you can become amazing at!
As eluded above, this can work both in positive and negative ways for you and so the importance of ensuring that compounding is working on your side could be the difference between your town eventually flourishing or deteriorating progressively over time.
There are a lot of very smart people using the compounding effect to achieve incredible levels of success. Being aware of these methods will allow you to take advantage of positive opportunities and avoid like the plague, traps which will bring you down.
The idea of compounding relies on actions you consistently do over long periods of time building upon each other naturally until they become forces of their own. The possibilities for this are immense and so expect many more letters on this subject in the future!
Rose-Blanc Town management