Compounding

As humans, we are terrible at understanding compounding effects. We tend to think in linear terms, but this blinds us to just how powerful compounding is.

A classic way to illustrate this is the following scenario: A genie appears and offers you either a million dollars now, or a sum of money every day for a month, starting with one penny today and doubling the amount you receive every day.

Which offer should you accept?

That million dollar offer is tempting, but the second option is significantly more lucrative: By day 30, you would net a whopping $10,737,418.23.

The compounding plan would initially be tough from a budgeting perspective, though. You'd have to wait a whole week to make your first dollar, and halfway through the month you would still only have $327.67.

It's hard to internalize just how dramatically something that grows like this can change over time, in part because it requires so much patience and delayed gratification.

But the truth is, many of the most important things in life compound. From relationships to wisdom, your investments in many areas grow exponentially over time. If you consistently put in the work, you'll reap the rewards.

For example, going to the gym once isn't going to have much effect. But if you go five times a week for six months, you'll see substantial changes in your fitness. The impact of that first workout actually increases over time if you maintain the habit.

If you want your efforts to compound, just keep going, and don't give up too early.

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