The Compound Effect

Are you disciplined? That is a yes or no question. If you find yourself starting to tell yourself a story, stop! Are you disciplined? Yes or no? I am very disciplined. I used to be all over the place. Realizing that was true and accepting it was the start of a solution.

As an example, I started this newsletter a year ago, and I write each week whether I have anything to say or not. Most weeks, I’m not sure until I sit to write what I am interested in writing about. I block the time to sort things I’ve pinned from my own reading throughout the week. That is my first pringle, my trigger to do the work. After pinning all my charts and videos that struck me in some way, I start typing. It’s that simple, but that doesn’t mean it is easy.

It’s a discipline with a good heaping spoonful of trust that something will happen if I start. The video below is what got me thinking about this topic. The quote above showed up in another article I read, and things fell into place. That said, I’m not proud of the work; I’m proud of the discipline.

My question for you? This week, were you focused on results, or were you focused on the discipline to do the work in front of you to the best of your ability? Trust that is enough. The results come in time. How do I know that? Well - everything compounds.

I added Darren Hary’s - The Compound Effect to the podcast. It is another great one if you haven’t read it.

I’d like to add that when you start anything new, you don’t have to figure out how to do it all. The starting is enough. Awareness is more than enough if you then act on what you know.

If you want to kick your habit and mental discipline up a notch, listen to all my podcasts here on Habit and Mental Discipline here:

a BORROW SMART CONCEPT
The Power of Compounding: Why Everything Starts Slow and Then Explodes

Most people underestimate how everything compounds—not just money but habits, knowledge, relationships, and even problems. At first, the progress is barely noticeable, but over time, the effects accelerate dramatically.

The Slow Start and the Sudden Surge

Compounding follows an exponential curve, a power law dynamic, which means the biggest gains come after a long period of what feels like stagnation.

Here are a few powerful examples:

1. Money: The Classic Example

If you invest $1,000 at 10% annual interest, the first year only earns you $100. But after 20 years, the account is worth $6,727, and by 40 years, it explodes to $45,259—all without adding extra money. The final years see huge jumps because past growth builds on itself.

2. Learning: The Knowledge Snowball

At first, learning anything new feels frustrating. You struggle with the basics. But as you gain a foundation, new knowledge sticks faster. A language student might feel lost in the first year, but by year three, they’re thinking in another language.

3. Fitness: Strength Over Time

When people start working out, progress is slow. But over months and years, muscle memory kicks in, endurance increases, and small gains start stacking up. A runner who struggles with a mile today could be running marathons in a few years.

4. Relationships: The Deepening of Connections

Friendships and professional relationships compound, too. A first meeting may not feel impactful, but staying in touch and adding value over time leads to deeper trust, opportunities, and unexpected rewards years later.

5. Problems: The Negative Side of Compounding

Compounding isn’t always positive. Small bad habits—eating poorly, neglecting finances, or procrastinating—may seem harmless at first but can spiral into major issues over time. Debt compounds. Neglect compounds. And before you know it, small problems become life-altering ones.

The Lesson: Stick With It

The key to harnessing the power of compounding is patience and consistency. The biggest rewards always come after the longest period of slow growth. Stick with good habits, financial discipline, and personal growth long enough, and what felt like an uphill climb will suddenly turn into momentum you can’t stop. Inertia works for you until it works against you, just as it works against you until it works for you!

What are you compounding today?

LIABILITIES
What’s Happening?

REAL ESTATE
What’s Happening?

ASSETS
What’s Happening?

ON BEING HUMAN
What’s Worth Sharing?

DOPAMEMES
And Other Happy Moments…

AI
and The Future of Work…

Borrow Smart University || National Institute of Financial Education