The compound effect is the idea that small, seemingly insignificant actions can lead to huge results over time.
- Chart from Interest Rate
Atomic Habits: “Changes that seem small and unimportant at first will compound into remarkable results if you’re willing to stick with them for years.”
Applications: (coming from Atomic Habits)
- Productivity Compounds: 1 extra task every day.
- Knowledge compounds: Learning one new idea every day.
- Richard Hamming: “intellectual investment is like compound interest, the more you do the more you learn how to do, so the more you can do”
- Relationships compound: The more you help others, the more others want to help you. Results in broad and strong connections over time.
- Stress compounds
- Negative thoughts compounds
- Outrage compounds
The aggregation of marginal gains: Philosophy of searching for a tiny margin of improvement in everything you do.
Small habits make a big difference.
Too often, we convince ourselves that massive success requires massive action. If you get 1% better each day for one year, you’ll end up 37 times better at the end of the year (WTF that is insane)
Conversely, if you get 1% worse, you’ll decline to nearly 0.
Habits are the compound interest of self-improvement. The same way that money multiples through compound interest, the effects of your habits multiply as your repeat them.
Success is the product of daily habits - not once-in-a-lifetime transformations.
You should be far more concerned with your current trajectory than with your current results.
This is why building systems are so important. Here are the systems I have been implementing:
- Using Obsidian for knowledge
- Using Notion to track relationships with the people I meet
- Using Notion to track daily improvement
- Tracking my time with Toggl Track
As I’ve started to publicize my Obsidian, making a public website for it makes me realize how powerful the compounding effect is, because it takes SO much time to just go over all of my notes, and clean them up for public consumption in 1 setting. Just shows me how powerful these Habits of writing everyday has been, and how much powerful thought I have come up with.
This is another term that I stumbled upon recently, really similar to compound effect. The snowball effect is a psychological term that explains how small actions can cause bigger and bigger actions, ultimately resulting in a big impact.