Compound Growth
“Compound interest is the addition of interest to the principal sum of a loan or deposit, or in other words, interest on interest.” (Source: Wikipedia)
Perhaps you’ve heard the business proposition: “Would you rather have $3 million dollars today, or 1 Penny doubled every day for 31 days?”
On the surface $3 million seems like the better deal and if the world were to end tomorrow, you’d be happy at least you’d get to spend some portion of that money today. But at the end of 31 days, 1 Penny doubled every day would be worth over $10 million.
In the book, “The Compound Effect“, the author talks about his upbringing and how his dad trained him to make daily small commitments to improving his life for the long term.
“It’s not the big things that add up in the end; it’s the hundreds, thousands, or millions of little things that separate the ordinary from the extraordinary.” (Darren Hardy, The Compound Effect)
Compound Growth in Nature
If you look at the structure of a nautilus shell, you’ll notice the ever increasing size of each new layer of growth, where the next expansion builds on the last.
This is known as the Fibonacci Spiral and represents how growth takes place in all of nature. It is highly efficient, not wasting any of the previous effort. The Nautilus Shell Growth allows the creature to grow inside. It builds a larger shell keeping the former in place. It doesn’t cast off the previous growth.
In other creatures, like a snake, it discards the old skin, because it is no longer useful as it expands into it’s new phase of growth.
But, that is the difference between the Nautilus Shell and a Snake. The Nautilus Shell makes use of the previous growth to generate new growth.
Fibonacci was an an Italian Mathematician who noticed this growth in nature and created a mathematical formula to represent this type of growth:
- This results in a numbering system where you add the previous number to the current number to get the next number. Example: 1+2 = 2, 2+1=3, 3+2=5, 5+3=8, 8+5=13, 13+8=21, 21+13=34, etc.
- As in nature, humans are trained to recognize this type of growth. This makes the Fibonacci numbering system useful in financial markets observing how stock prices adjust up and down within the limits of Fibonacci retracements.
Compound Growth in Learning
- No learning when applied is ever lost. Especially when we write it down.
One reason I like blogging is that it serves as my ready reference for the learning that I have accumulated. And based on the keywords I remember from the title or the content, it’s easy to access large volumes of information with minimal storage in my brain.
Disparate pieces of knowledge that have been in my continuously learning schedule, now come into my thought process months after I have learned them to give some fresh new insight.
This is actually very exciting to me, because no knowledge I acquire is left wasted. If I can’t use it now, I realize something that I have learned how to do will be useful at some point in the future, so I just store it away. And even if the exact piece of knowledge isn’t used it might lead to other discoveries and that is really serendipity when that happens.
What are your favorite ways to store up your knowledge?
Do you write blog posts like me? Do you have a folder system for storing key pieces of information? How do you learn and more importantly retrieve information for future use from your own personal learning?
Knowing you need to make time for learning is just half the battle. Join a community of like-minded people who want to make time for learning to help you achieve your goals.
Upskill Create is all about creating a lifestyle of continuous learning and then applying what you have learned to secure your future and create a life you love. Our mantra is Learn. Create. Share. Repeat!
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