Stop shiny object syndrome by understanding the power of compound interest...
Very few people realize how much compound interest affects their life...
The Slight Edge did a great job pulling back the curtain on how powerful it is in all areas.
Today, I'd like to expand on this topic and share a new way to think about compounding...
Remember "Mike"?
For 5 years, Mike slogged away, trying to start a new business...
Let's go back in time to figure out what happened...
In the beginning, Mike found a good blogging course.
The course promised 100 daily visitors in 100 days if he would do the work.
He's at point "A" and sees "B"...
For the next 100 days, he plans to follow the course to add one daily visitor, which will help him get to "B", like this:
This is a big mistake.
Why?
First, he's planning to get results right away.
Notice the green line goes straight up from the beginning.
Second, he believes his results will be consistently linear.
Third, he thinks he'll be able to see the finish line getting closer each day, which will keep him motivated.
These are false assumptions.
Here's his likely path, compared to his original...
See how different that is?
Imagine his frustration when the results follow the black line instead of the green line.
This curved black line is what compound interest looks like when you graph it out.
Why this curve?
1.) His results will be slow at first, forcing him to experiment.
2.) Trial and error will improve his skills.
3.) His improved skills will give him better results.
4.) Past results also contribute to improved future results.
Approximately 80% of the total results come in the last 20% of the curve, as shown in the colored areas below...
That's important.
It means that Mike won't get one visitor per day consistently, until day 50...
It also means that on day 80 of his 100 day plan, he'd only have 20 visitors per day.
What are the odds he'll stick to his plan if he doesn't know this ahead of time?
Now, here's the twist:
See how the line curves up from left to right, as more results accumulate?
Imagine this black line is a walking path.
As you walk from left to right, it would be easy at the beginning (left), and difficult at the end (right), as it goes up.
Right now, this graph shows results building up over time.
When it's presented this way, it doesn't show how difficult it is to get these results.
Let's change something...
Watch what happens when we rotate the graph 90 degrees to the left...
Now the black line looks like the face of a cliff.
This is what it feels like to work on a plan where results slowly compound over time...
This is Mike's reality.
And if we start at the end and draw a straight line down the path, we realize Mike can't even see the finish line when he starts.
When he begins, the end is nowhere in sight.
In fact, unlike the linear path, he won't see the finish line every day until he's almost done.
He has to trust the process.
And he has to stick with it long enough to round the bend.
After he does 80% of the work, he'll be able to see the end goal for the remaining 20% of the time.
Don't forget, he didn't know any of this five years ago.
So here's what happened...
After his first 27 days, he's tired (and bored).
He's got almost no results.
And he's nowhere near his plan of 27 daily visitors by day 27.
That's when he hears some people talking about some new methods that are fast.
They promise their systems deliver results immediately...
Now he's faced with a choice...
It sure seems like it would be better to get off this cliff and try one of those other hills.
And so he does...
He comes down, loses momentum, and starts something new...
It doesn't take long for him to realize this is just another cliff that's just as hard to climb.
So much for linear results...
And the wheels on the bus go round and round...
Fast forward five years...
A light bulb goes off, and he changes the way he thinks.
Now that he knows his results will follow this curve, he sets his expectations based on compounding.
That's the key.
He knows that even after 30 days of hard work, it's still too early to expect consistent daily visitors on the curve.
On day 50, he's planning to have one visitor per day.
Everything is going according to the compounding plan.
Finally, on day 83, he averages 20 daily visitors, and his skills have improved dramatically.
The 100 visitors per day finish line is in sight.
And he has no doubt that in the next 20 days, he'll be able to reach his goal.
See how that works?
The quickest way to reset your expectations is to simply imagine this curved cliff.
Then think about where you'd be on this curve, relative to your goal metrics.
(Note: If you want to know how to calculate all the points on your curve, just hit reply and let me know. I'll send the details over to you.)
I hope this will help you reach more goals in your life.
One more tip...
Clarity is the key to staying motivated on the curve.
When you know exactly what you're doing, it's easier to trust the process and move toward to the finish line.
If you need clarity, this is a good place to start...
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