==== ON POWERS ====
Einstein declared compound interest to be the “8th wonder of the world”.
Well, according to the internet, anyway 😉
We’re talking, here, about powers – exponential powers.
Whether or not Einstein DID say those words, the reality is compounding – exponential power – is an EXTRAORDINARY phenomenon.
It’s one that our idiot human brains have huge difficulty understanding.
Yet when you DO understand this power . . . you can put it to use in every area of your life.
Business, money, growth . . . certainly.
Relationships, health, learning . . . surprisingly, very much so.
What’s special about exponentials then?
First, let’s look at the difference between LINEAR and exponential.
If you took 30 linear steps from where you are right now . . . where would you be?
Well . . . if each linear step was about 1 metre . . . naturally, you’d be about 30 metres away.
Nothing insightful there.
Here’s where it gets surprising . . .
What if you now took 30 EXPONENTIAL steps . . . where would you be now?
To be clear, in this example I’m using “exponential” to mean DOUBLING.
So, after the first step you’d be one metre away.
The second step is a further 2 metres.
The third would take you another 4 metres.
And so on.
Where would you be after 30 steps?
At the end of the road?
Far side of town?
Other end of the country?
Just 30 exponential steps?
Actually . . . you’d have travelled 25 times round the planet!
25 times . . . in just 30 exponential steps!
Tricky for our simple human brains to grapple, yes?
Ok . . . that’s fascinating . . . but so what? What’s the relevance of this to your life and business?
Let me demonstrate . . . this time, not by doubling . . . but growing by an exponential rate of . . . just 1%.
What would happen if you did just 1% more, 1% better than you did yesterday?
Sure . . . you’d have 1% more as a result.
The world didn’t rock on its axis . . .
What if you did this for 10 days in a row?
Think you’d have 10% more?
Well actually, you’d be pretty close . . . you’d have 10.4% more.
Hardly anything to write home about.
Let’s take this seriously now . . . what if you now did 1% better, added 1% effort . . . every day . . . for a WHOLE YEAR?
How much would that be worth?
The linear result would be 365 x 1% . . . giving an extra 365%.
You’ve more than tripled your starting position.
Now, what about the exponential result?
I’ll spare you the maths . . . you’d now have 3784% more!
You haven’t tripled your starting point . . . you’ve multiplied it by more than 37 TIMES!
Let’s show this in financial terms:
If you started with £1,000 . . . a 1% linear year you’d end up with £3,650.
Not too shabby.
With a 1% exponential year, that £1,000 has turned into . . . £37,409!
Here’s the kicker . . .
What if you didn’t do 1% more each day, but 1% LESS instead?
That £1,000 at the start, turns into . . . £25.
Shocking, isn’t it?!
Do 1% MORE each day . . . £37,409
Do 1% LESS each day . . . £25.
This isn’t “just maths” . . . this is how the world ACTUALLY works.
It’s just difficult for our simple human brains to recognise it . . . it just seems too weird.
Notice the difference between £25 . . . and £37,000?
1% every day.
It’s the EVERY DAY that makes the difference.
Worth the 1% extra effort, don’t you think?