Today, I want to do something I haven’t done on Medium yet.
I want to tell you about a book I am still reading.
It’s not just any book — it’s Morgan Housel’s new book, The Psychology of Money: Timeless lessons on wealth, greed, and happiness.
The reason I want to tell you about this book is because of this quote I read in it that I’m still pondering. It’s thought-provoking.
I am a huge fan of the compounding effect.
It’s one of the the most powerful forces in the universe.
One of the best things you can do your life and is to understand the logic of compound — the exponential increase in the value of an asset over time. Gary Foreman from The Dollar Stretcher wrote, “What is compound interest? It’s interest earning interest.”
In other words, a small action repeated over time can make a huge difference in your life, career, relationship and finance.
The great Albert Einstein once said: “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
Most people want radical change, now. Real growth and progress doesn’t work like that. It takes time, patience and consistency.
Warren Buffett has been stressing the the importance of compounding for over six decades — it’s made him billions.
“I always knew I was going to be rich, so I was never in a hurry to”, Buffett once said.
If you’re serious about living an extraordinary life, you can use the compounding principle to your advantage to improve every area of your life. Those small daily actions add up — they count. Deliberate actions performed daily for weeks, months, years and decades changes everything.
Morgan’s book is full of personal money nuggets of deep wisdom. Go ahead, grab it on Amazon (no, this is not an affiliate link).
This post was previously published on Kaizen Habits.
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Photo credit: Rahul Dogra