"Compound interest is man's greatest invention because it allows for the reliable, systematic accumulation of wealth." – Benjamin Franklin
Pregame Prep (today's overview)
I believe consistent progress and steady growth are two keys to success, which is why I emphasize these concepts almost every week. Compounding is one of the most powerful principles that helped me build my playbook to freedom. In finance and investing there is the rule of 72. You can read about the rule of 72 in relation to how fast your investments will double anywhere – just Google it! In this article, I'm going to focus on how the rule of 72 (compounding) should be applied to your life.
Film Review (my experience)
When I first started investing and trading, I was always on the lookout for the next big thing. I wanted to make quick gains, thinking it was the only real way to grow my wealth. After losing plenty of money while going too fast and doing things I didn't really understand; I got frustrated. I realized that slow and steady growth is the real key to sustained long-term success. I know it's not super sexy, but the real power of success is through compounding which happens over time.
This realization led me to go back to the basics and then I explored the power of compounding in my life as well. The results have been astonishing – it's slow at first, but after a bit of time and allowing compounding to work, I began to see my wealth grow exponentially. I also found that the same principles applied to my personal life, my daily routine, and mindset, allowing me to achieve my goals and reach my true potential.
Through the incredible power of compounding, I've been able to create the life of my dreams. Every small, consistent step I've taken over the years has built upon the previous one, creating a snowball effect that has transformed my life in ways I could have never imagined. By leveraging the power of compounding, not only in my financial investments but also in my personal growth, relationships, and daily habits, I have achieved a level of abundance and freedom that once seemed like a distant dream.
Now, I wake up each day with a sense of purpose, excitement, and gratitude. I am surrounded by a loving and supportive community, and I have the time and resources to pursue my passions and make a positive impact on the world. This remarkable transformation didn't happen overnight; it took patience, discipline, and a steadfast commitment to the power of compounding. It's a testament to the fact that when you embrace the principles of compounding and consistently invest in yourself and your dreams, the possibilities are truly limitless.
Offensive Game Plan (actions to obtain freedom)
Consistency: Making small but steady improvements in daily habits leads to significant personal growth over time. Don't underestimate the power of consistency. Whether it's learning a new skill, improving health, or strengthening relationships, taking small steps each day can lead to incredible results. Consistency is the key
Time is your most important asset: Time is an invaluable resource in life. The earlier you start and the more time you invest, the more significant your growth will be. Make the most of your time by prioritizing what's important. Do things that matter, spend time with people that you care about. Time>Money
Balance Risk and Reward: It's essential to take calculated risks for growth; it's also important to recognize when to be cautious and avoid unnecessary risks. By finding the correct balance of risk to reward, you will make more informed decisions and optimize your personal growth. There is no simple formula here; you need to find your comfort zone and go a little past that. Don't take risks that will bankrupt you or cause you too much stress, but do push yourself!
Embrace the Power of Patience: Just letting consistency and time do the work often yields the most significant results. Real, lasting change takes time, and it's crucial to trust the process and remain patient as you work towards your goals.
Defensive Game Plan (actions to defend your freedom)
Diversify Your Experiences: Exposing yourself to a variety of experiences and learning from different people broadens your perspective and helps you develop a more well-rounded understanding of the world. This helps you make better decisions and lead a richer, more fulfilling life. I LOVE diversification
Stay Disciplined: I can't emphasize this enough – discipline is destiny. Ryan Holiday said it best, you should read his book! The more discipline you build into your compounding plan, the more success you will see. It's okay to have some fun; it's okay to fall off the wagon. It's not okay not to get back to your game plan. Things will happen; you will have setbacks. Just stay disciplined and get back to your plan.
Maintain a Healthy Balance: Remember, achieving long-term success requires balance. Don't neglect other areas of your life in pursuit of financial growth. Don't get so focused on one area that you let another area completely go. I have seen this struggle in many clients, and I work with them every day to find the right balance. A healthy balance between work, family, and personal development is essential to creating a life of true freedom and abundance.
Post-Game Review (key takeaway)
The Rule of 72 can serve as a valuable guide not only for our financial investments but also for our personal growth and decision-making. By focusing on consistent growth, making the most of your time, balancing risk and reward, diversifying your experiences, and embracing patience, you can apply the wisdom of compounding to our lives and experience tremendous personal growth.
If you follow the ideas I've outlined today, you'll be well on your way to achieving the abundance and freedom you desire. Remember, it's the small, consistent steps that lead to big results. So, start early, stay disciplined, and watch your wealth and personal growth compound over time. With the right playbook from Playbook to Freedom, you'll be well on your way to creating a life of abundance and freedom!
Hey Coach! (Connect with me)
If you enjoy this post please consider signing up for email updates.
If you would like daily thoughts and insights you can follow me on Instagram @playbooktofreedom
If you want to chat more about compounding: Lets talk