I learned some great stories from this article about the compounding effect, things that accumulate which leads to exponential growth over time.
How Ice age was formed because of a thin layer of ice left unmelted from the cool summer.
Warren buffet started investing since he was a child. Had he started investing in his late twenties, his net worth would be just north of $1 billion instead of the current $80 billion. Although $1 billion is still a lot of money, he'd be nowhere near the richest man on earth.
What about Amazon which started as a book business. They have a strong value proposition in the early days where they can offer way more catalogues in their online compared to your local ones.
One common thread between these story is of course the compounding effect, but more importantly, it shows what can be built on top of a strong base.
Which brings me to my reflection on what base can I build now that my future self will appreciate?
James Clear shared some habits that have high rate of return in life:
- sleep 8+ hours each day
- lift weights 3x week
- go for a walk each day
- save at least 10 percent of your income
- read every day
- drink more water and less of everything else
- leave your phone in another room while you work
These are great, and there are a few more I would add:
- Feed your body with healthy wholesome food as much as you can every day.
- Develop real friendship with people from different background, culture and personality. Build a diverse network.
- Exercise creativity. Do something that challenge you every day. Be a continuous learner.
- Save money but also invest wisely, because inflation is real. $1 million now will be worth a whole lot less when you retire.