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Thursday, April 12, 2012

Compound Interest

Bare with me here - numbers are not my thing and if they aren't yours either just follow along - I do have a point! According to Wikipedia Compound interest arises when interest is added to the principal, so that, from that moment on, the interest that has been added also earns interest. This addition of interest to the principal is called compounding. A bank account, for example, may have its interest compounded every year: in this case, an account with an initial 1000 and 20% interest per year would have a balance of 1200 at the end of the first year, 1440 at the end of the second year, and so on.  And this is how Warren Buffet got his millions.
You may not be able to see the graph in too much detail, however, you can see the green line that looks kind of like a staircase right?  If you can't grab a magnifying glass - this is important!  What that line says is that after a certain period of time there will be an increase and then things will remain constant for a time and then they will increase again.  And this will continue to go on as long as 
THE ACTIVITY REMAINS CONSISTENT.


So, I wanted to ask you today - 
1. what types of activities are you doing? 
2. are they producing results? 
3. are the results continuing to improve?


You see, in order to see change in yourself you have to be in it for the long haul.  If you are expecting rapid change and overnight success I bet you are constantly disappointed with yourself.  Have you always wanted to run and just can't seem to get past the 10 minute or 3 mile point?  Have you started an exercise program and because you didn't see results after 30 days you quit?
Have you wanted to save so that you could pay cash for something important to you?  Are you struggling in a relationship that seems to be on and off?


Compound interest is not just financial - its in your fitness, your personal development, your relationships with others - it is in everything you do.  If you want to improve yourself as a whole you have to be willing to do the day in and day out things, that seem so mundane at times, but this is the activity that will lead to the increase - over and over and over again....so ask yourself - where do I want my fitness to be a year from now?  Where do I want my bank account a year from now?  Where do I want my marriage a year from now?


Set your sights on whatever it is that you want to be better at, find out how to increase in that area, and GO DO IT!!


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