by J. Chad Mitchell, author of “Change Your Game: Empowering Young Leaders to Ditch Doubt, Find Their Voice, and Impact the World“
If a genie appeared and gave you this choice, would you choose a penny today that doubled everyday for a month (thirty days), or $1 million today?
If you took a single penny and doubled it every day, by day thirty, you would have over $5 million – $5,368,709.12 to be exact. That’s the principle of compounding at work. If you changed the time frame from thirty to twenty-seven days, you would have only $671,088.64. This is why compound interest has been called “the eighth wonder of the world. He who understands it — earns it. He who doesn’t — pays it.”
The principle of compounding is not limited to money. Do you want to build a snowman? If yes, you need snowflakes — lots of them. You start with a handful. Then, using pressure and energy, you combine your handful of snowflakes with other snowflakes. As you continue to roll the lump of snow, those snowflakes combine with more snowflakes, and those snowflakes combine with more snowflakes, and it just… well, snowballs. Keep applying energy and effort, and your snowball continues to grow until it is a solid base for a snowman.
What do compounding pennies and snowballs have to do with you? Compounding is at work in your life, whether you like it or not. Think about this: Improving just a little each day, like 1 percent daily for a year, leads you to become nearly forty times better over that time frame. Go back to the example of practicing the piano that we used earlier. If someone practices each day for a year, they will be a much better piano player at the end of that year. Or, as Michael Jordan said, “If you do the work, you get rewarded. There are no shortcuts in life.”
The principle of compounding applies across most areas of life: money, learning, relationships, talents, and work. Getting a little better each day taps you into the growth of compounding consequences.
Compounding reinforces what is happening. Compounding doesn’t distinguish between good choices and bad choices. If I keep making the same decision about not caring about what I eat for breakfast (for example, Monday = nothing, Tuesday = root beer, Wednesday = toast, Thursday = nothing, Friday = three donuts and chocolate milk, Saturday = scrambled eggs, Sunday = leftover pizza), those decisions are going to compound. If I care about what I eat for breakfast, those decisions will also compound. You are young, so perhaps your habits do not seem to matter. But with time — think years, not days — your habits’ impact on your life can be enormously good or bad.
The choices we make feed our inner wolves. But not all choices are the same. Not all choices compound at the same rate, just like not all snowflakes become snowballs. Some of our choices are more like Takis. Think of these as one-off choices. They are like snacking on little treats. They are more than nothing, but not much. Eating a few Takis here and there (at least for young pups like you all) is not going to make a big difference because you don’t eat Takis at every meal (at least I sure hope you don’t).
Now, think of your habits and the consistent choices you make that have a great compounding effect. These are like your daily breakfast, lunch, and dinner. What you choose to eat each day during these three meals is going to impact your life significantly: your health, your strength, your looks, your ability to think clearly, to do work, to focus, and to play. The Takis (infrequent random choices) you eat will have a much smaller impact on you. But your habits — whether they are good or bad — are what you feed your wolf for breakfast, lunch, and dinner.
The famed Russian author Leo Tolstoy told a zealous youngster, “Young man, you sweat too much blood for the world; sweat some for yourself first. You cannot make the world better till you are better.” In other words, the better a person you are, the better a leader you will be. HELLO? Do you see where this is going, and how important this is?
The better a person you are, the better a leader you will be. The better leader you are, the better your community will be. The better your community is, the better your country will be. The better your country is, the better our world will be.
So… let’s take a few steps back.
Habits are the compounding of our consistent choices.
What we are is the compounding of our consistent habits.
The better leadership habits we have, the better leaders we will be.
That’s the power of compounding.
But this is not a book about habits. If you really want to dive into the subject, the book “Atomic Habits” by James Clear is a great place to start. For an even deeper dive into your habits and how to reset your relationships — including with yourself — I would recommend first reading Stephen Covey’s book, “Spiritual Roots of Human Relations“. Here’s a powerful quote from the latter book. I hope it gives you a sense of the change you could accomplish in your life just by focusing on your habits.
“Habits have a tremendous gravity pull, more than most realize or would admit. Breaking deeply embedded habitual tendencies, such as procrastination, impatience, criticalness, or living in excesses or selfishness, involves more than a little willpower and a few minor changes in our lives. We’re dealing with our basic character structure (what we are inside) and need to achieve some very basic reorientation or transformation, of values and motives as well as practices.”
*excerpted with permission from the book “Change Your Game: Empowering Young Leaders to Ditch Doubt, Find Their Voice, and Impact the World“
J. Chad Mitchell is a longtime coach, teacher, mentor, and father who has spent more than 30 years helping young people discover their leadership potential. He is the author of “Change Your Game: Empowering Young Leaders to Ditch Doubt, Find Their Voice, and Impact the World“, a practical guide that teaches youth how to lead with confidence, integrity, and purpose. Chad leads at Summit Law Group PLLC in Seattle, serves as President of his local Boys & Girls Club board, and coaches boys’ lacrosse at Richland High School. More at www.jchadmitchell.com.
