“Compound interest is the most powerful force in the universe. Compound interest is the eighth wonder of the world. He who understand it, earns it. He who doesn't, pays it.”
- (attributed to Albert Einstein)
“All the returns in life, whether in wealth, relationships, or knowledge, come from compound interest.”
- Naval Ravikant
Financial compounding can turn a consistent saver earning a mediocre salary into a multi-millionaire. That same powerful force can bankrupt a consistent borrower making only mediocre debt payments. Now imagine two siblings who start in the same place but go in these opposite directions. Because of compounding, they will have an ocean of financial difference between them in just a few decades.
As Naval observes, this is not just true of wealth. It's true of many other things: knowledge, health, relationships and more.
Might all success in life ultimately be explained as the compounding returns of good choices? And might all failures be explained as the compounding returns of poor ones?
Everyone is fallible. We all make good choices and some really bad ones. But perhaps it's the amount, direction and pattern of those choices that counts — because choices compound over time.