First a quote: “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it.” – Albert Einstein
Most of us know the benefits of compounding interest and have heard, for most of our adult lives, why it is important for our future financial health. We know we should save money, regardless of how little, on a regular basis, and let it grow over time… all the while earning interest on the amounts invested and then, earning interest on the interest.
The wonder, as Albert Einstein calls it, is the process of generating profits on an asset’s reinvested earnings. To work, it requires two things: the reinvestment of earnings and time.
My focus this morning however, isn’t on the value of compounding interest on our financial investments… but rather, the compounding impact of our daily habits, both favorable and unfavorable.
For example, if I read 10 pages from a book about leadership, each day for the next week, will I be the most awesome leader you ever met next Monday? Hardly, especially for those who have known me for any amount of time. But, what if I develop the habit of reading 10 pages each day for the next several years, and practiced the principals and skills I learned in all of that reading… then what? While I still might not be the most awesome leader you ever met, the compounding effect would make an impressive and unimaginable difference, especially from today’s vantage point.
What about our habits around personal health? If I go to the gym this evening and work out for an hour, will I be the picture of health tomorrow? The obvious answer is no. But then again, what if by habit, I was to work out for an hour, three days a week, over the next ten years?
Unfortunately, the compounding effects of our habits also work in reverse. If I enjoy a cheeseburger with a large order of fries and a large cola tonight, will I have a heart attack tomorrow? No, not likely. But, what if I enjoy my favorite meal (cheeseburger & fries) four or five nights a week for the next ten years? The results are almost predictable. I do so love cheeseburgers… I’m humming a favorite Jimmy Buffet song right now as I type.
Now, let’s pick one simple leadership behavior as an example. Will one handwritten thank you note motivate your team and aspire them to greater levels of performance? I think not. But, will a habit of gratitude and appreciation, over time on your part, make a positive difference? I suggest you give it a try and see for yourself.
Pick any of your habits, positive or negative, think about the compounding effect they are having on your life and on your career. Maybe it is time to start investing your habits differently. Choose your “habit investments” wisely. They can be either extremely costly, or immensely profitable over time. We are each responsible for the habits we create and continue.
All habits have a compounding effect! It is up to you to decide if your investments are positive or negative. What habits do you need to change? When will you start?
How will you lead differently, or better, this week?
“Expanding Your Capacity for Success”