Compound interest is the interest earned on interest, and while this is generally applied to the effects it has on money, it can also apply to other parts of life that supports the adage where the, the whole is greater than the sum of the parts. It is about taking small steps and maximizing impact of each, making the outcome more valuable. But, there is also something to note, as the impact might be reduced if there is a big bang release, without visibility on the steps to get there.
I was reminded of this today at work, where I run a cadence of monthly steps with Sales Teams, each focusing on a skill area adding up to a sequence of development to empower their results. These smaller chunks of development have standalone value too, which means that they are able to use them immediately and improve and iterate, as well as get benefits in the interim, but the maximized value is when all the parts are applied together to compound against each other. Training them as a group however, would mean each component wouldn't be developed to as high a standard, reducing the impact of each and creating bottlenecks in the weakest pieces.
However, I was also thinking about this in terms of building an account on Hive, where there are the obvious financial processes of compound interest in play. For example, there is the 20 percent HBD annual return, meaning that it will take about 3.5 years to double the principle amount. 100 becomes 200, and 3.5 years after that, it is 400. That is a 400% increase in 7 years.
But of course, that is based on a principle amount of 100 and on Hive, that is not the only way to invest, because time and effort can provide additional inputs. These are the small steps that create the greater whole and just like compound interest, consistency in continually stepping is valuable - but it isn't only valuable in the economic sense.
Being a consistent contributor also provides a raft of other personal values too, improving our delivery abilities, knowledge, mindset, understanding and expanding our experience. This in turn adds additional value to what we are able to deliver, meaning that the audience is also benefiting, as our quality increases, as does the level of interest, especially as relationships continue to develop alongside. These things (and more) compound together to build our persona on Hive, our social reputation and therefore, our value as an individual and as a content creator on Hive in general.
If we break this all down into the many individual steps though, the value of each is quite small, but if we focus only on that individual value, we miss the chance of compounding it against all the other micro values. This is why I believe that the value of an individual post isn't that high, but the value of an account that produces a lot of little values outperforms the account itself.
It is impossible to calculate some of these values, even though the blockchain records the associated transactions, because there is a lot of tacit transfer of information that happens through the back and forth and in the heads of the audience and creators. It is something that a lot of people forget, that while influence comes from an outside source, behavior is driven internally and this can be a process facilitated passively or actively with intention.
Intentional action is like investing action, where the intention is to get benefits from a chosen behavior. This can lead to passive gains, as some behaviors can become codified habits, generating value without having to put a lot of thought into them. While others might take a lot of energy to apply, but they gain access to possibilities that wouldn't be there otherwise.
Very few professionals fell into all of the skills they needed in order to do the job, rather, it was a process where one thing led to another and took them down a pathway they may not have initially seen. Some of the things they might have enjoyed doing, some of the things they might not have, but they added to their ability to improve and do more of what they enjoyed doing. Like not liking gym work, but loving game day.
There are lots of skill clusters, but I was wondering what it is that makes a person interesting, something to consider for an attention economy. The easiest way to get attention is to create drama, but that is generally short lived and relying on it is likely going to push most people away, especially the audience that pays, as it is just too much to deal with, when life is full of other things that need handling too.
The hardest way to get attention is to be very good at what one does, as it not only requires the learning part, but also the delivery part to prove through making impact. In time though, once proven, the attention is there because trust is built, making further interaction far more likely and easier. Once proven, there is an assumption that what is to come will be valuable too and therefore, invitations are accepted.
While trust isn't easy to build, it is definitely easy to lose. This also means that if one doesn't want to lose it, there is a pressure to deliver what is worthy of the audience, which is a challenge in and of itself, especially if narrow in topic. This is possible for example with sports people who capture the attention of the people interested in the sport. But in general, those who make the biggest impact are those who bring more to the entertainment table.
Similarly to compound interest, there are also compound harms, where small action impacts will lead to an increasingly bad result. For anyone who has been in longer relationship that has failed knows, it is generally the little things that mount up, not the big things. I think that we all have a lot of small behavioral quirks that get in the way of of our potential, essentially working against the good behaviors. Therefore, reducing the bad actually helps compound the good, without necessarily adding more good. It is like cutting sugar out of the diet, but not increasing exercise, it will still be a benefit. Then, increasing exercise compounds those benefits.
While for a lot of people, this discussion might not be that interesting at all, perhaps for those looking to improve their outcomes, it gives some time and possibly some points to reflect upon. It might not be targeted toward investing or content creation, but understanding about how our actions compound and impact on our lives, is a good step toward building the behaviors and processes to improve our lives. Or perhaps, it changes how we consume and value content itself.
All it takes to generate large scale change, is a series of small steps.
What outcomes are you looking for?
What are you investing to support it.
Taraz
[ Gen1: Hive ]
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When friends and I first discovered the blockchain (STEEM) we decided together that we would simply try it out and each amass 1000 of the tokens as part of our grander objective of obtaining 1000 or every token. No consideration towards compounding. All I found were compound benefits.
Not only was I pleased to find whatever stack I had amassed paid compound interest passively, we could double it down to click Upvote and leverage that stake to more rewards. Then came the bigger compound on stable coin staking and then the Hive DEX tokens compounding not only rewards, but returning Hive in some cases! I am sure I am only scratching the surface.
The time it took to create content, network, curate and even think about the blockchain while not doing that were considerable but the result of motivation from even the financial compounding returns.
Along the lines of the skills you mention in your sales mentoring, gloves are off. To calculate the compounded value of writing skill practice, absorbing knowledge from every corner of the world directly, friends I have made, and the global insight we all gain from curating content from every country imaginable, I can't even. Then there is the practice of consistency, value of being thoughtful and participating in authentic discussions when the time is convenient, and even helping someone directly with an upvote, wallet transfer, or even delegation (I have consistently delegated half of my little stack for quite a while) and the value of compounding yourself in others who do the same.....My head starts to hurt valuating that.
As for outcomes, besides having an account worth thousands of dollars (while twitter and facebook stars are sitting on zero) with the realistic potential to double in value in a very short time, the power of my network of progressive doers is lifechanging in its potential. What am I willing to invest? My most valuable of personal commodities: time and attention.
This is a a great comment and I agree with all of it. It is an amazing place and the potential value it can bring an individual is enormous. Too many focus on the narrow, put their attention on the value of a post, as if that is all there is.
I am not going to add more, but I am going to push this to the top of the comment list for others to read. :)
You have that power!
Again, I don't fault people with narrow vision as that is how I started. You just can't help to see all the compound value with time the closer you look.
I value that above all else. Not only the financial returns but the knowledge on the topic, and on other topics. The feed from places I won't ever have the time to visit, etc. The personal observations of worthy people from wherever (but somewhere different), etc.
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Interesting topic. That goes well with my post today about learning. Learning compounds as well if we keep at it and especially if we keep adding to it.
I'd say this is really the biggest power of doing things repeatedly. When they become habits we no longer have to dedicate as much mental effort to doing them. Win! Passive gains are the best gains, eh? Not just in passive earnings on our crypto holdings, but passive actions gained from our habits.
Unfortunately this can be a double-edged sword. So many professionals find themselves in that trap where they are afraid to experiment with something new because they don't want to risk losing their audience. I see this in photography circles all the time.
Small actions, small improvements, compounding. There is a fairly popular book, Atomic Habits, that talks about all this. Good stuff!
I liked that book! Including the kind guidance of my man @rubencress, I’ve been on a creative tear since studying it. The confluence is uncanny sometimes.
One thing we can do for all of our life, is learn.
Absolutely. Which is why we have to actively try to ensure that the habits we make, are good ones.
And yes, you are right about professionals in this regard. It is like being typecast into a role and then there is an expectation that that is all one can do.
Firstly, when I joined Hive, I did not know how it works so I ran away from it. I did not even know how it works talkless of compounding.
At some point, I just decided to come back to see how things are. I came back to Hive in February with $4 and I bought some Hive too.
Compounding my interests has made my account get to $70 and I will continue to compound. I believe that that I can become a whale if I continue to compound.
You can become a whale, but it will take a while :)
Compound interest is defined as the eighth wonder in my opinion!
As you rightly say, however, it can be applied both positively with majestic results if you have the patience and a good plan, but also negatively and you made me think a lot about this, I confess that I had never dwelt on it in depth.
The results I seek are of various kinds; mainly I want to grow and improve because for me it is essential to be a better person every day.
As far as my investments are concerned, I'm trying to create financial freedom, I have a plan, goals and many small steps to take one after the other... trips are made by putting one foot in front of the other and repeating, no ?
I'm just going to stop for a moment on the subject of financial freedom, for me it doesn't mean not working; I just want to free up my time and create economic serenity, more than for me for my family; having done this probably as long as I enjoy it and it's convenient for me I will also continue in my work.
I think this is natural - who wants to dwell on their own flaws?
Yep. On a related but separate note, I feel a lot of the entertainment we are fed is built to trigger the feeling we are stepping, even though we are getting nowhere.
Work can bring meaning - it is just when we "have to work" that we feel oppressed by it.
Well yes indeed yes, even if I often stop to reflect on my defects and how to improve them, of course then between saying and doing there is a sea in the middle eh eh!
Behold You have enlightened me again with Your words; if I had to tell you what I'm looking for it's just to eliminate that word "duty", I would like to choose, if I work because I feel like it is one thing but, when I no longer feel like it and I don't like my job I would like to be able to say enough without having to give account to no one ... that time will come, you'll see!😉
The sea in the middle can be very wide - maybe even an ocean :)
I also think that there is the potential that jobs that might be bad when we are forced to do them, aren't that bad when we could leave if we wanted too :)
I’m betting on a lot of small things add up to creating an account that has value greater than the small things themselves. It’s a good recipe I think! I don’t have anything mind blowing to say but offering my perspective on things can be a good thing and let’s me carve out a small chunk of my own along the way.
Skilling at work is definitely about doing the things even if they aren’t what we want to do! I’ve done a lot of brutal shit over the years but you do that and take the experience and compound it up to where you are at in the future. It’s hard to see the forest through the trees or whatever that saying is but eventually you can find a clearing before you dip back into the forest.
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Exactly. There is they say that "those who don't know, teach" - but this is not true. Those who want to know teach also, as the teaching mechanism helps build knowledge and can lead to behavioral change. I know this isn't teaching, but the discussion is very valuable for those who participate.
Like a lumberjack - the clearing is the space after the job is done - but then it is back into the forest :)
You are only talking about the good compound interest. I know too many people bogged down in debt that are drowning in the compound interest that they owe!
As far as Hive goes, I'm still getting in the habit of doing my daily comments and getting into the habit of daily articles of my own has been challenging. Honestly, it is not so much the content or the topics, but for some silly reason it is the thumbnail images and formatting/marking that gives me the most headaches.
Something I like about your presentation and approach is that it is so simple, clean and effective. I'm not sure what function you use on LeoF to highlight those impactful lines of text, but it works well for you. And I love the poignant little messages at the end. I haven't read much of your earlier work, but one can definitely tell that your investment in developing your craft and personal style has definitely compounded your returns.
Hopefully, I am able to continue compounding my gains on Hive, both in crypto valuation and with my writing habits/routines. With that being said, time to focus on my next brawl report =)
You are preempting my next post!! :D
Are you using peakd?
Easiest way is to set up templates in the snippets section. I use this for pieces of the formatting code, as well as for different signatures etc. You can even create a whole template in there. There are also different inbuilt functions in the editor.
> this is a quoteThat is very easy to do without a template.
But, this is a good list of basics too :)
Also, just think how cool is it that you can play a monetized game like Splinterlands, and then earn more in a community talking about the game you paly :)
It is awesome being able to be rewarded for creating content about a game I love. Hive stays on the resume!
I started thinking last night about what I might do come the next bull run to position myself better for the following bear market. On the skills side of things, I always say that I know a little bit about a lot of things, so I think on some level that compounds into what could be perceived as wisdom or knowledge.
When people are narrowly focused, they miss the big picture. I am not good with details, but I can connect dots relatively well :)
Aye, exactly. Still fighting with my demons in order to reduce that sugar stuff. I could always make an excuse that my mind is quite burnt out and needs the energy influx. Very, very short-term of me.
An I have just sinned.
I came across this recently - worth the watch:
I was thinking something similar yesterday when I was writing the post and reading some people's quotes. We read their quotes and idolize them sometimes. But only when they have already succeeded. I've met people who have said much stronger things. I've even had to ask them whose words are those? And they were their words. But no one would quote them (except me), because no one knows them.
And then I came across Trump's quote. I don't even remember which one. But I recently watched a show that exposed all of his business dealings. And Trump to me is just a crook. So his words mean nothing to me.
It's funny, it turns out that sometimes the words of a man off the street will mean more to me than the words of Trump or any other brilliant crook...
Survivor bias!
Reputation, earned or perceived matters.
Some people follow advice because of who it comes from. Some follow advice because of what it is.
Thanks, I learned something really important today! 💪
@tarazkp It is very important to understand both Compound interests and Compound harms to improve our live. Normally Common people think that they should get paid at the same time for their every work they don't want to compound their individual works to do something big.
For example:
People want Ecency Points in return for every comment they make to boost their post. So, They only open a post and comment " it is a good post." They don't read the whole post because it is time taking and Apparently have no extra reward.
But if they read the whole post and comment accordingly then engagement with other user start which may leads to some autovotes, other people also comments and vote on your posts.
Compound interest increase the outcome of every individual part of work. Similarly Small mistakes add up to big losses which is an example of Compound Harms.
No one wants to be a student anymore.
When it comes to interacting on Hive, those who take the easy way, find they aren't going to get much out of it :)
I think compound interest is something similar to our experiences. However, one proceeds linear, the other proceeds curved :)
There are no straight lines- with enough gravity, even light bends its path :)
The correlation can apply to every aspect of your life. Small baby steps are what make a considerable difference when you use it to your daily routine.
they say, "learn something new every day", but I also think it might be better to "apply something new everyday" as well.
Apply something new every day can be much harder... I believe you can try to introduce something new and apply it for at least 3 weeks to become integrate it into your daily routine.
I believe that having small will lead into big. I am happy with compounding interest here in hive, small but atleast you have something to wait.
With enough work, things move pretty quickly.
Thanks for this. Hopefully my small steps now will become quick too.
And the more it sits, the more it becomes right... Imagine saving a 100 usd in the savings every month... Imagine what you'll have at retirement...
20 % is insane.. Laughs not even a bank can give you such returns 😂😂
23 years til retirement for me, putting in 100 a month = 27,600 total.
Hot dayum.... It's a lot more than I expected.
I've got 38 years, saying I retire at the age of 65. Laughs not bad though not bad.
Where did you get that calculator? Just a quick google?
compounding matters!!
Easy tool:
https://www.investor.gov/financial-tools-calculators/calculators/compound-interest-calculator
But it's calculated daily? Isn't it monthly?
Not sure tbh. However, you would still end up at $11,442,917.48
Yeah I did a monthly now, it's pretty much the same... I added 1000 usd as an initial with 100usd monthly at 38 years.
Ended up with $13,132,102.02
That is major, I never really thought about it like that.... And that's dollars that is worth so much more for me 😂💵 and yet I can still afford to put away 100 usd a month... If I stack 200 I'd be retiring well over here. 😂
Compound interest for bad is very good, and applicable here a boy stole a ball, then a bicycle then some money at home and so he grew up to become a criminal and by joining with others brought an entire economy to its knees, that was our case, so you have to be careful with the evil children that you see the failed genetics that we do with them, that is the crux of the matter.
Well, going back in time, 3.5 years is quite short and it is enough to enter and you will know that duplicated your hbd I am growing my hive stack thanks to this, and with a little daily effort it grows one by one, making fortunes grow to be better in coming futures.
Let's continue that tomorrow we will laugh at small efforts like this that paid for our financial freedom.
3.5 years is definitely short - yet, people act like it is an eternity. If it is time spent doing something enjoyable too, what is the harm?
I wonder how many little boys who stole, learned from their ways?
Yes it Is very shorts Time, 3.5 years, AND yes i have a friend with a genetics very bad, that you said guau a thief Is here un Little years.
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I feel as though it is important to not rest. I keep constantly trying to improve my photographic ability, but it doesn't always bring me new clients and experiences with my camera. I feel as though I rapidly plateau once I gain a new type of skill, and perhaps, another element of my image quality is compromised as I add new elements of image making to my skill set.
It strikes me, just now, that everything is a trade off. Everything is a balance. The saying of "Fast, Cheap, Reliable", pick 2, when referencing cars, comes to life here.
Each and every output is a fine balancing act of variables to get a result. Too much salt, or too much sugar, never both. Unless you want to create something difficult and problematic for your tastebuds.
I'm not sure where I was going with this rambling reply, but I guess I'll just live up to my little bio. Rambler. :)
i like how compounding is also working with skills and learning, not only with cash and crypto...
learning a bit every day, for 10 years, that is major in compounding terms, for example.
Yes, I agree with you, it is very difficult to build trust and very easy to break it, a little thing can destroy the trust that took years to build, and tobreakingrust can only take you a little time.
Regaining trust is even harder.
Yes sir, Thanks for sharing.
A very beautiful and important thing you said is that we cannot gain faith easily but we can lose it very easily. To get success in this faith or anything today, we need small steps and only through this we can achieve big things.
Very interesting and informative
I think this is life in a nutshell. The actions we take will invariably lead to bigger results down the road. Whether they be positive or negative.
That said, as a young kid, I marvelled at the power of exponential growth via percentages when I was presented with that quiz scenario of "taking a lump sum amount of allowance or starting with 1 cent a day and doubling it everyday for a month".
That was probably when I realised, in my own little way, that compounding brought about huge results.
I agree that all of the large changes are preceded by a bunch of small steps. It all adds up and nothing happens right away. I personally want to compound my own wealth and that is why I have cut back on my own spending. At the same time, I put aside part of my own earnings and I make sure to have an emergency fund to make sure that my funds to invest stay invested.
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If you're really interested in the Future, you've got to read a few of my posts...
Compound interest is bit tricky and also to be able to have the scope and skill to manipulate them would create space to get more on profit margin.
But for many people, it is still a far reaching concept as they look for only basic interests to gain.
I really agree with that, which I havent thought yet.To accomplish such things, what we need is to have critical eye of judgment over the prospect of life and that notion,that even the small habits and wrong choices lead to compounding. Thats great!
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When the annual percentage is 20 or more, the miracle of compound interest begins. I remember Buffett writing about it.