Adopting a compound interest mindset.



As a former banker, I have always been aware of the power of compound interest. As applied to finance, it means that you earn a small sum of interest on the principal and then if you do not withdraw it, you earn interest on the small amount of interest that you earned. Left alone in this manner, the principal amount can balloon to a significantly large amount over a period of time.


We extract the core principle from that example as "small changes accumulated over a long period of time can completely alter what was in the beginning." On a major scale, the way evolution has worked, the way the universe, in the cosmological sense, has emerged, and the way the rock gets hewed by the river flowing over it are examples of this compound interest phenomenon. The time scale over which these changes have occurred is mammoth which some people cannot comprehend and hence even refuse to accept it. That is another story.


But this compound interest principle of change can be applied to a number of other areas of our life where we will be able to notice the changes. Doing small consistently over a period of time is the principle. We may want to read, but crib about lack of time. If we manage to read for just fifteen minutes a day, we can read about five pages and in a month we would have covered 150 pages and in a year around 1800 pages. That is roughly equivalent to six books.


Dedicating five minutes to cleaning around the house is enough to complete the entire cleaning cycle in a week. We get overwhelmed when we look at the entire house needing dusting and keep postponing it. A small amount of work every day gets the job done in a slightly longer period of time.


Rather than looking at walking as a chore that you need to do and never doing it, how about five minutes of walking? Sometimes it is the start you need. Once you start, you gather momentum and can keep going. But to start, if the task is too long we postpone it. So look at doing something for only five minutes. Anything that is done beyond five minutes is a bonus.


The compound interest attitude can be brought into many facets of our life. Even when we want children to do something, ask them to do it for five minutes. Five minutes of a job done every day adds to two and a half-hour in a month. Five minutes of studying a non-interesting but essential subject every day is enough to finish the book in two months. The daily time seems insignificant but the monthly time adds up to a substantial chunk. If you ask someone to do a job (learning, chore, health-care, maintenance, skill) for two and a half hours they are highly unlikely to start. But five minutes a day? Good chance of getting off to a start. Given the ever-decreasing attention span, this is a good way to get regular stuff done.

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