The Secret Power of Compounding for an Extraordinary Life

How small steps lead to big gains. Learn how to harness the power of compounding in your life and work.

What if you could take a big career leap and be a lot more successful? Understanding compounding is a huge tool for gaining that extra out of your life. These tools are not simple tricks and tips that ensure your success in an instant but are tools which boost your life for eternity. In the coming section, you will understand the meaning of compounding and how you can take advantage of compounding techniques.

Compounding in economic terms means the interest on interest. This system of summing up the interest on principle and cycling the process, again and again, is one of the simple tricks used by rich people to gather wealth. Let us see an example for visualising this growth.

Let’s say you invest ₹5000 every month on some systematic investment plan(S.I.P) like an index fund or mutual fund and the return rate on the percentage is 12%(this could be the least return rate avoiding all the risk elements).

For each time period, the gain was exponential. Even if you subtract the loss of inflation and other defectors the gain is just insane. As youngsters there is so much to learn from this experiment. Now you may be wondering how a financially focused aspect can have an impact on our daily life. The main components used in this SIP calculator are time, investment and compounding interest. If these investing habits could make you rich then what maybe the other applications where these techniques can be used? Remember a famous quotation by Albert Einstein: “Compound interest is the eighth wonder of the world. He who understands it, earns it; he who doesn’t, pays it.”

What is it that a science guy has to say about things related to finance? Maybe his words were a little satirical. The way we understand certain things could result in various solutions to the same delusion. I am sharing my sincere opinions. The effect of gradual changes in lifestyle is also much similar to the way compounding works. For comparison let’s assume that you attend a violin class every day.

Also, there are other possibilities…

This technique has countless possibilities not only in building talent or skill but also in the field of creativity. I do take a piece of paper and try to write something on it for 30min every day for practice and to grow my creativity. Not only me, everyone who does creative work tries to produce not-very-good content every day to sharpen their creativity. They create content in bulk and trim it but doing it so consistently makes them great.

You may live fifty to ninety years. In this life span use time wisely to invest in some of the growth habits to turn your life into something memorable and inspiring. Now that you have learned about this here is what you should do. Develop three habits for your wealth and health. Make a to-do list for keeping track of these three habits.

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