Einstein is best known for devising the theory of relativity, but many don’t know he also studied and wrote papers on the ebb and flow of stock prices and the mathematical equations used to attempt to determine, in advance, if a stock price was going to rise or fall. His research led him to say that “compound interest is the eighth wonder of the world. He who understands it, earns it. He who doesn’t, pays it.”
Many people say they understand the concept of “compound interest,” but then act and make decisions entirely contrary to their professed understanding, attempting to get rich quick by buying lottery tickets or simply refusing to invest even a small amount every year, with the excuse that there’s no point, given the amounts they can afford to invest are so insignificant. But another way this “eighth wonder of the world” is misunderstood is that it applies to many situations, including one’s own capabilities, knowledge, skill and success in just about every endeavor, not just in finances.
Small incremental improvements accumulate and compound over time, providing exponential results.
For example, you can only truly learn to sell by actually selling – getting in front of prospects and attempting to get them to buy from you, over and over again with as little space in between “lessons.” You cannot learn it sitting in a classroom or on a webinar. That’s not to say that learning by “classroom” instruction is a bad thing – far from it. It provides critical infrastructure, systems and a framework. But only applying what you learn leads to true mastery, just as actually investing your money is the only way to get compounding interest working for you. You can observe great salespeople all day long, ask them questions, swipe a tactic here or a strategy there, but ultimately you MASTER selling – which is a mix of experiential judgment, pattern recognition and skill – by actually practicing those skills in a real-life situation with a live prospect.
It takes time and repetition – a compounding of “interest” in skill.
That’s because success in anything – marketing, selling, hiring, etc. – is not just the tactical “how to” but an accumulation of “gut” judgment that compounds over time. You start to get a “sixth sense” or feeling that you just know what to do, what to say and how to respond. That pattern recognition is what true mastery is – and why so many highly successful CEOs will tell you to trust your gut on critical decisions. What they FAIL to tell you is that you have to develop that “gut” sense by putting the time and effort into skill development and repetition.
I am 1,000% certain that success in business is a learned capability you EARN over time by investing in the mastery of business strategy, marketing, salesmanship, leadership, etc. It is NOT governed by your circumstances, genetics, upbringing, geography, competition or any other external factors, as many want you to believe. Influenced, yes. Governed? Absolutely not. Those are simply the lay of the land as to where you START, not where you journey to or ultimately finish.
The word “accumulate” is defined as “gathering or piling up especially little by little.” Skills and experience, like money, deliver compound interest over time – and like money, you earn interest on your interest – but only if you’re willing to get your reps in and let it compound.