The simple equation you need to know to succeed at life, love, and everything between.
“Compound interest is the most powerful force in the universe.”
Einstein
Compound interest is an immutable wonder that you can either understand and utilize (to your great benefit) or ignore and languish (though probably not to your great benefit).
Typically when we discuss compound interest it’s within a financial perspective.
If you want to grow wealth, well… the best method is through the magic of compound interest.
Or you could rob a bank…
But short of launching into a full-fledged criminal career, if you truly want to obtain great wealth, you do it through the intentional utilization of compound interest.
Then again, you could ignore compound interest and just continue on with your life. I highly recommend against this course of action, but hey, to each their own.
Just know that the rest of the world (ie: banks/credit cards/what-have-you) are all using compound interest to their benefit which, unfortunately, more often than not, comes at your expense.
So you can either play the game or get played. The choice is yours.
But here’s the thing many people don’t realize about compound interest: It doesn’t just apply to accumulating oodles of money.
It applies to everything.
If you want to level up in life by doubling down on your skills while growing beyond your current comfort zone, you do so by implementing a simple formula I affectionately dub The Success Formula.
Okay, so it’s not the most creative name ever conceived, but it’ll do for today’s purposes as we try to illuminate the basic building blocks of success.
THE SUCCESS FORMULA
You probably didn’t wander into this article eager to do a lot of math, so we’ll keep this super simple (and abdsurdly abstract).
Distilled to its purest form, The Success Formula looks like this:
(Compound Interest + Hustle = Success)
And there you have it, everything you need to succeed in life, love, and everything between. Good luck and god speed, my friend!
Alright, bad joke. Sorry.
Why don’t you come back over here and I’ll explain this simplified view of success.
There are only 3 variables comprising The Success Formula. You’ve got Compound Interest, Hustle, and Success.
That is, Success is a direct result of Hustle plus Compound Interest.
Let’s break this down.
Hustle, as I define it, is the persistently consistent application of focused effort over a given period of time. Check the link below to read more about Persistent Consistency.Want to be the best? Do this.The difference between wild success and epic failure is often decided by this single thing…medium.com
Compound Interest, as I define it, is the addition of interest to the principal sum of a deposit.
So in this formula we’re viewing Hustle as the consistent deposits you make into the Bank of You, whereas Compound Interest are the effects of accrued interest on those deposits.
Think about it like this: If you want to be successful, say…at downhill skiing, well, you could just go to the mountain and ski a bunch.
That’s a type of deposit and for sure it will pay dividends.
But what happens when the season ends and the snow melts?
Well, now those deposits are accruing interest at a slower rate than inflation (age + memory loss), which means that if you do absolutely nothing over the course of the next year, you will enter the next ski season slightly worse than you were at the end of the previous season.
If, however, you tweak your interest rate during the down-season so you can get a bit more out of your principle balance, well… then come next snowfall, you can enter the season (at minimum) where you left off, or (at best) you’ll be at an even higher level.
What sort of tweaks can you make to your interest rate to make sure your skills are compounding as much as possible during the down-time?
Perhaps you hit the gym and do a glute-busting amount of squats so that you enter the next season in fighting shape.
Maybe you spend an hour or two each week mentally rehearsing the steps required to get that buttery smooth carve. Visualization, even during the off-season, can have profound benefits. The studies on this one are pretty well conclusive.
Other tweaks you could make to your interest rate are taking up summertime activities which closely parallel downhill skiing. What those actually are, I haven’t a clue. I’m not a downhill skiier, but I’m sure there’s stuff out there.
Regardless, skiing is just the example.
The point is, if you want to succeed in life, you must find ways to maximize the compound interest you enjoy off the back of your hustle.
Think through whatever skill or area of life you are currently trying to improve and ask yourself, “Am I getting the best possible rate of return here?”
If the answer is no, well…you’ve got some work to do, my friend. Get out there and start figuring ways to put The Success Formula to use.
