Ep. 6 - Compounding Transcript

00:00:04 Anthony Carl

If you're consistent in a lot of different things, you probably will make results, but it also is important if you're going to be making these large decisions with that consistency that you're going down the right pathway.

00:00:17 Brian Faust

I think one of the important parts of having success over a long period of time is almost finding failures, but only by showing up, and only by putting yourself out there having goals pursuing those, do you get to find the opportunities where things might not work, and then you can pivot to the.

00:00:31 Brian Faust

Things that do.

00:00:37 Brian Faust

Hello everybody and welcome to the Ego Lab podcast.

00:00:40 Brian Faust

My name is Brian.

00:00:42 Anthony Carl

I'm Tony.

00:00:43 Brian Faust

And today we are going to talk about compounding.

00:00:47 Anthony Carl

That's it.

00:00:47 Anthony Carl

Compounding is a magical principle, magical concept, and it can completely change the way that you think about your life and productivity and pretty much everything, including wealth and money.

00:01:01 Brian Faust

Yeah, if you've got goals, this is a great way to leverage.

00:01:04 Brian Faust

Getting there.

00:01:05 Brian Faust

Hi, Tony.

00:01:06 Brian Faust

I know both you and I love this story about compounding.

00:01:09 Brian Faust

Why don't you take us?

00:01:09 Brian Faust

Through it.

00:01:10 Anthony Carl

OK, so the story goes like this.

00:01:12 Anthony Carl

There was a king who loved chess, and he wanted to hold a chess tournament to incentivize people to participate.

00:01:19 Anthony Carl

He said he would honor any prize that they chose.

00:01:24 Anthony Carl

Upon losing to a sage, the sage requested that he merely and modestly only put one grain of rice on the first square, and then double that grain of rice for each subsequent square on the chess board.

00:01:41 Anthony Carl

The King quickly realized that he would.

00:01:42 Anthony Carl

Be unable to.

00:01:43 Anthony Carl

Fulfill the promise because on the 20th square the king would have had to put 1,000,000 grains of.

00:01:48 Anthony Carl

Rice on the board.

00:01:50 Anthony Carl

And on the 40th square, the king would have had.

00:01:53 Anthony Carl

To put one.

00:01:54 Anthony Carl

Billion grains of rice, and finally, on the 64th square, the king would have had to put 210 billion tons of rice.

00:02:04 Anthony Carl

Which, if you can imagine that.

00:02:06 Anthony Carl

That's allegedly enough to cover the entire territory of India with a metre thick layer of rice.

00:02:15 Anthony Carl

That is a lot.

00:02:16 Anthony Carl

Of rice.

00:02:16 Brian Faust

That's a lot of.

00:02:17 Brian Faust

Rice, yeah.

00:02:18 Anthony Carl

Yes, it is.

00:02:20 Anthony Carl

So that kind of demonstrates.

00:02:21 Anthony Carl

The power of compounding.

00:02:23 Anthony Carl

And it's very-- humans have a hard time even picturing.

00:02:29 Anthony Carl

How much the effect of compounding has because we don't, we just don't comprehend like the doubling of things like that.

00:02:37 Anthony Carl

Our brains aren't wired to imagine that kind of growth.

00:02:42 Brian Faust

Yeah, I think in everyone needs to talk about compounding.

00:02:45 Brian Faust

A lot of people first thought probably goes to money 'cause we always hear, you know, investing over time.

00:02:49 Brian Faust

But as we're going to talk about today, there's so many ways you can apply the same principle of compounding to, you know, learning new languages, growing, getting better at your job or your career, anything like that.

00:03:00 Brian Faust

So yeah, it's great.

00:03:02 Brian Faust

Great skill, great tool.

00:03:05 Anthony Carl

Yeah, So one kind of framework that a lot of people use in regards to using compounding to grow as an individual is the 1% rule you want to talk a little bit?

00:03:17 Anthony Carl

About that, right, Brian?

00:03:20 Brian Faust

Yeah. So when you think about the compounding, you know, it doesn't always have to be doubling to have tremendous effects. Even just getting 1% better at something every single day can give you tremendous gains, so.

00:03:33 Brian Faust

Tony, do you know what the number is? If you get 1% better every single day for 365 days, how much better will you

00:03:40 Brian Faust

Be at the end of the year?

00:03:43 Anthony Carl

Uhm, that depends on are we talking the 1% is compounding or are we?

00:03:49 Brian Faust

Yeah, 1% compounding.

00:03:49 Anthony Carl

00:03:51 Anthony Carl

I don't know the number.

00:03:52 Anthony Carl

What's the number, Brian?

00:03:52 Brian Faust

Number is you'd be 37 times better, not 37 percent, 37 times better at the end of the year.

00:04:01 Anthony Carl

That's a lot.

00:04:02 Anthony Carl

But I do want to make the distinction that.

00:04:05 Anthony Carl

Let's say.

00:04:05 Anthony Carl

Let's say you weren't.

00:04:06 Anthony Carl

Let's say you weren't even compounding.

00:04:09 Anthony Carl

1% better. You'd still be 365% better.

00:04:14 Anthony Carl

Which is huge.

00:04:15 Anthony Carl

That's like over three and a.

00:04:17 Anthony Carl

Half times better.

00:04:19 Anthony Carl

Even without compounding, if you could improve by 1% a day.

00:04:23 Brian Faust

Yeah, there's a great, uh, Woody Allen quote I think about all the time. It's 90% of life is just showing up.

00:04:28 Brian Faust

So being consistent, staying with, you know, if you have a goal, stick with it if you.

00:04:32 Brian Faust

Have a skill you're working on?

00:04:33 Brian Faust

Stick with it.

00:04:36 Anthony Carl

Let's maybe explore a little bit about.

00:04:39 Anthony Carl

Like, what does 1% better look like?

00:04:42 Anthony Carl

How can you become 1% better in a day?

00:04:45 Anthony Carl

Is it realistic to compound like that 1%?

00:04:49 Brian Faust

Yeah, Tony, there's a tremendous story that kind of goes with the 1%.

00:04:52 Brian Faust

Rule so back in 2005, the British Cycling team.

00:04:57 Brian Faust

They hire A new coach, new performance director.

00:05:01 Brian Faust

And they go from being the laughingstock of the cycling community.

00:05:04 Brian Faust

They don't win anything.

00:05:05 Brian Faust

They're coming.

00:05:06 Brian Faust

In last place.

00:05:07 Brian Faust

You know, nobody wants to be associated with them.

00:05:09 Brian Faust

Within five years they come back, they start winning Tour de Frances they start winning gold medals, they start winning everything.

00:05:16 Brian Faust

Nobody can beat these guys.

00:05:17 Brian Faust

And the question becomes, you know, how did they get so much better so fast?

00:05:21 Brian Faust

And when it comes down to is they didn't leave any stone unturned, they got 1% better.

00:05:25 Brian Faust

all the time.

00:05:27 Brian Faust

And that was finding different pillows to sleep on when they would train to get better night's sleep.

00:05:32 Brian Faust

Analyzing their uniforms so that there was the perfect blend that they could coast through the air faster.

00:05:37 Brian Faust

Analyzing every single part of the bike to make sure that it was optimized for each rider using different massage gels so they would recover a day.

00:05:45 Brian Faust

Faster or 1% better, and all these things put together accumulated in these tremendous growths in a very short period of time.

00:05:53 Brian Faust

So I think when you.

00:05:54 Brian Faust

Look at like, you know, if you're somebody who's in an area where you want to get better on a team, find all the little ways you can get better and start chipping away at those.

00:06:03 Anthony Carl

That's a great story, I think.

00:06:05 Anthony Carl

I think it really changes the way that.

00:06:08 Anthony Carl

We look at success because I think a lot of times there's when people see success, it always shows in these very dramatic ways, like these overnight successes, one, you know, pop song of the of the year just like came out of nowhere.

00:06:25 Anthony Carl

But in reality, I think the truth of the matter is that it's just.

00:06:29 Anthony Carl

It's the collection of all the little things that these people do and those compound into these huge results that it's things that you don't even think of, like the small things every day when you do all of those.

00:06:43 Anthony Carl

It's it adds up.

00:06:44 Anthony Carl

To that 1% or that 2% or 3% that just grows and grows and grows.

00:06:49 Brian Faust

There's a great quote.

00:06:50 Brian Faust

I forget who it's attributed to, but it's like, you know, I took it took 20 years to become an overnight success.

00:06:55 Anthony Carl

Yeah, exactly. Exactly.

00:06:58 Anthony Carl

And when I think about like.

00:07:01 Anthony Carl

Some of those little things in my own life that I often think about is just little things.

00:07:06 Anthony Carl

Like instead of working in my bed, working at, making sure I compartmentalize and like, only work at my desk so that I can shift gears faster when I'm, like going from rest or or to work, and that I can sleep better at night.

00:07:21 Brian Faust

Yeah, we talked in the podcast the second one

00:07:23 Brian Faust

We did about time management, and you had shared a lot about making sure you turn your phone off an hour before bed, leaving it outside your bedroom.

00:07:30 Brian Faust

That way it doesn't distract you and you can unwind.

00:07:34 Anthony Carl

Yeah, or or other little things like just putting in place systems that.

00:07:42 Anthony Carl

That don't seem that insignificant, but can make a big difference, like like placing your shoes in front of your bed before you go so that you wake up and run in.

00:07:50 Anthony Carl

The morning and.

00:07:51 Anthony Carl

Just all those little things tend to add up to create these huge amounts of success that you wouldn't even realize.

00:07:59 Brian Faust

Yeah, I mean, even just, you know, it's working on this podcast we started a few months ago and seems like the more we show up, you know, the better we get.

00:08:07 Brian Faust

And it feels like it's happening faster the more we've shown up.

00:08:10 Brian Faust

You know, the growth we had in the first month didn't seem as much as the month as the growth we've had over maybe the last month.

00:08:16 Brian Faust

There's just all these things showing up.

00:08:18 Brian Faust

Trying to get better, it paves the way.

00:08:21 Anthony Carl

Yeah, it really does.

00:08:22 Anthony Carl

And I think a lot of that has to do with.

00:08:25 Anthony Carl

When you when you create things and create this framework and this foundation for yourself, it's more.

00:08:31 Anthony Carl

It's easier to add on to those things.

00:08:33 Anthony Carl

So, like, once we created a system for keeping our notes and making our outlines, then we could we could add on to that in new ways that wouldn't have been possible without the initial.

00:08:45 Anthony Carl

Foundation, and I think that's part of the magic of compounding.

00:08:49 Anthony Carl

The more things that you have in your life that you just put in that extra effort, it creates new avenues for opportunity.

00:08:58 Brian Faust

Yeah, I mean now success leads to success when you are successful in things it.

00:09:03 Brian Faust

Allows you to.

00:09:04 Brian Faust

Quickly find other people who are successful, other connections, other resources.

00:09:09 Brian Faust

You know, you become a resource and you can start helping other people, and teaching is a great way to learn.

00:09:14 Brian Faust

So just all those little things come together.

00:09:16 Brian Faust

Success leads to more success.

00:09:19 Anthony Carl

And that reminds me of the idea of like.

00:09:22 Anthony Carl

Start with one habit and use that as like an anchored habit.

00:09:26 Anthony Carl

So once you have one secure habit, you can start building other habits into that same same concept of like a foundation.

00:09:35 Anthony Carl

So maybe every morning before you brush your teeth, you do one other thing that could be really helpful for you.

00:09:43 Anthony Carl

Do 5 pushups or something and then you can start building off of literally habits to create more beneficial habits.

00:09:51 Brian Faust

Yeah, when I think about habits and compounding the clear overlap is consistency.

00:09:55 Brian Faust

What are some of your thoughts on consistency?

00:09:59 Anthony Carl

I think consistency.

00:10:01 Anthony Carl

Is extremely underrated.

00:10:04 Anthony Carl

A lot of people think that working hard.

00:10:08 Anthony Carl

Is the answer to.

00:10:10 Anthony Carl

Getting things done and moving the needle.

00:10:15 Anthony Carl

I think more so than working hard, consistency is important.

00:10:20 Anthony Carl

If you just take the small steps, as we've been alluding to this entire time, if you take the small step every day and make sure that you do it every day, that will get you further than putting in like a short burst every week or so.

00:10:37 Anthony Carl

Because... the compounding effect.

00:10:39 Anthony Carl

And one way to kind of build on that and to make sure that you're consistent is to just reduce the friction.

00:10:47 Anthony Carl

As we as we've mentioned in past episodes.

00:10:50 Anthony Carl

Reducing the friction into doing things.

00:10:53 Anthony Carl

So like instead of saying promising yourself, you'll write like 20 pages.

00:10:57 Anthony Carl

Promise yourself you'll just open your laptop and open word or whatever you write on a Google doc, and then from there it's kind of like sunk cost fallacy you I opened my computer, I might as well.

00:11:09 Anthony Carl

Might as well write a little bit.

00:11:11 Anthony Carl

Applying strategies like that can help you be more consistent.

00:11:15 Anthony Carl

Which in turn can cause the compound effect, which is the principle of reaping huge rewards from a series of small smart choices.

00:11:24 Brian Faust

Yeah, if you're looking for tips on reducing friction, check out episodes one and two of the Ego Lab podcast.

00:11:30 Brian Faust

In a practical way that I think about reducing friction is playing guitar.

00:11:34 Brian Faust

I leave my guitar in a stand versus being.

00:11:35 Brian Faust

In a case.

00:11:36 Brian Faust

So that way I can just walk by and pick it right up.

00:11:39 Brian Faust

So I play it every day and I notice that when I play it every day for a month, I feel a lot better at the end of that month.

00:11:44 Brian Faust

And I do if I only play it for three days and I can play a full song or I can.

00:11:48 Brian Faust

You know, play my fingers, feel like they're hitting the right spots on the guitar versus finally pick it up for a couple days here or there.

00:11:54 Brian Faust

You know, next week, pick it up a little bit.

00:11:56 Brian Faust

It's a little tougher to get that same feeling on the guitar and get the same level of growth.

00:12:01 Anthony Carl

Yeah, I think it definitely has to do with something, something to do with like the way we learn and the way we we grow.

00:12:08 Anthony Carl

I think just doing something everyday, it really facilitates those neural pathways growing and I've noticed that some of my like strongest periods of learning and growth are when I worked whole is the same thing.

00:12:22 Anthony Carl

On like consecutive days in a row.

00:12:26 Anthony Carl

Rather than like shifting gears and switching between things.

00:12:30 Brian Faust

Yeah, it's always important to ask the question, you know, like where do you want to be putting your time and, you know, how do you set

00:12:36 Brian Faust

Up a framework to be able to do that?

00:12:39 Anthony Carl

And for the listeners out there, that begs the question, like are you, do you think you're focused enough on one or two things that you are building that cumulative knowledge or are you too spread out or you are you focusing on many things that don't really get the attention that they deserve to create that snowball effect?

00:12:59 Brian Faust

Yeah, well, you care about what you're doing a year from now, five years from now, 10.

00:13:02 Brian Faust

Years from now.

00:13:05 Anthony Carl

Yeah, just to kind of visualize that that idea, let's say you have one snowball at the top of the hill and you start pushing it down and it's rolling and it's getting bigger and then instead of keep going and and turning that snowball into an avalanche, you switch and run back to the top of the hill.

00:13:23 Anthony Carl

And start a new snowball.

00:13:25 Anthony Carl

And then you roll that snowball down the hill and then you stop, maybe even sooner, and then and then a new snowball.

00:13:30 Anthony Carl

The snowball will never make it to that point where it turns into an avalanche.

00:13:35 Anthony Carl

You're just going to have.

00:13:35 Anthony Carl

Like four or five.

00:13:37 Anthony Carl

And you know in some cases like 20 or 30.

00:13:41 Anthony Carl

Small little mediocre sized snowballs.

00:13:45 Anthony Carl

That don't really equate to any outstanding results.

00:13:50 Brian Faust

I think a little caveat to that is you gotta know when to pivot and persevere.

00:13:54 Brian Faust

So it might be better to have 4 little snowballs and one avalanche than it is to have, you know, one avalanche and something that isn't something you're really passionate about or something that's doesn't bring a lot of value.

00:14:06 Brian Faust

So there can be some value in starting a couple, but the key is to make sure that you're not spread too thin and that you're.

00:14:11 Brian Faust

Paying attention to the right avalanches.

00:14:15 Anthony Carl

Yeah, again, and that that's a really difficult thing to know.

00:14:18 Anthony Carl

Sometimes it's hard to know what to work on and we talked a lot about that in our destinations episode.

00:14:25 Anthony Carl

How do you know what you want to work on?

00:14:27 Anthony Carl

What's your destination?

00:14:28 Anthony Carl

So if you need more insight on that, check out episode one destinations.

00:14:33 Brian Faust

Yeah, perfect.

00:14:35 Brian Faust

There's a really interesting concept I've been playing around with lately and.

00:14:38 Brian Faust

And it's study the history and philosophy and not the news.

00:14:42 Brian Faust

And it doesn't mean that you can't pay attention to.

00:14:44 Brian Faust

Current events.

00:14:44 Brian Faust

But the point is, what is important.

00:14:47 Brian Faust

Today is different.

00:14:47 Brian Faust

Tomorrow is different the next.

00:14:48 Brian Faust

Day get caught.

00:14:49 Brian Faust

Up on all these little pieces and all these little stories, when you study philosophy and history and you read things like, you know, meditations by Marcus Aurelius, things that stand the test of time.

00:14:59 Brian Faust

You can kind of have a more global picture and you can kind of see things over a longer period of growth versus getting caught up on those like moment to moment or day-to-day things.

00:15:11 Anthony Carl

Yeah, I agree with you.

00:15:13 Anthony Carl

I I'm not a huge fan of the news.

00:15:15 Anthony Carl

I feel like it's distracting and I feel like it's kind of a detractor of value rather than anything else in history.

00:15:22 Anthony Carl

You can you can make better predictions of the future with history than.

00:15:27 Anthony Carl

Than anything, because you can study the patterns of just, human nature.

00:15:30 Anthony Carl

And as Brian was saying, you can kind of get a more global picture, but beyond, beyond that, knowing where to spend your time, that brings in.

00:15:41 Anthony Carl

One of the concepts and principles that we're, that we use and talk about a lot is the Preto principle.

00:15:47 Brian Faust

Yeah, the Pareto principle. If you're not familiar with that, you might have heard of it as the 80/20 principle where 80% of the results come from 20% of the inputs.

00:15:55 Brian Faust

So this goes across all domains, whether it's, you know, investing money or investing in your career, investing in relationships, paying attention to which 20% really moves the needle will get you the 80% of results.

00:16:09 Anthony Carl

And so that can be really helpful because if you're consistent in a lot of different things, you probably will make results.

00:16:16 Anthony Carl

But it also is important, if you're going to be making these large decisions about consistency, that you're going down the right pathway, which is where the 80/20 principle could be a really valuable rule.

00:16:29 Anthony Carl

Try and be consistent and devote the most time to the things that are in a top 20% of importance.

00:16:36 Anthony Carl

In your life.

00:16:37 Brian Faust

I think one of the important parts of having success over a long period of time is almost finding failures.

00:16:43 Brian Faust

When you keep showing up to things, you're going to find things that don't work.

00:16:46 Brian Faust

You're going to find areas where you can make those decisions up.

00:16:50 Brian Faust

No, I really do need to pivot here.

00:16:51 Brian Faust

But only by showing up and only by putting yourself out there, having goals, pursuing those, do you get to find the opportunities.

00:16:57 Brian Faust

Where things might not work.

00:16:59 Brian Faust

And then you can pivot to things that do.

00:17:02 Anthony Carl

Yeah, that's that's a tough challenge that you kind of brought up 'cause.

00:17:06 Anthony Carl

It's very difficult to move past this sunk cost fallacy.

00:17:09 Anthony Carl

So if somebody has been consistent with something for a long time, even something like a career, if you've been doing a career for 20 years, you're good at it.

00:17:18 Anthony Carl

You've applied that compounding principle.

00:17:21 Anthony Carl

But is that really what you want to be doing?

00:17:23 Anthony Carl

Are you happy with those results?

00:17:26 Anthony Carl

So just knowing when to pivot and finding those failures and figuring out what you don't like now so you can get on that train, start building that snowball in the right area of your life is so important.

00:17:39 Brian Faust

Yeah, makes me think of the negativity bias. You know, they do these studies and they ask people, you know, would you be willing to bet $20 to win $20?

00:17:46 Brian Faust

And overwhelmingly, people say no, and they find that the amount they have to offer people to win has to be pretty high.

00:17:52 Brian Faust

It's like 40 or $60.00 for a lot of people that they'd be willing to risk that $20.

00:17:58 Brian Faust

A place we see this often is relationships.

00:18:00 Brian Faust

You know, I've had some relationships that have gone on for years and you end up getting to the point where maybe you feel like it's not.

00:18:06 Brian Faust

Right fit.

00:18:07 Brian Faust

But you know, you do have so many good moments, and there are.

00:18:09 Brian Faust

So many good things.

00:18:10 Brian Faust

Be hard to look past that, but you think, yeah, maybe this isn't for me.

00:18:15 Brian Faust

I have to give up some of the good stuff for the potential of having maybe things that are better fit or that are more for me in the future.

00:18:21 Brian Faust

And that could be really, really difficult.

00:18:23 Brian Faust

Took in some cases a very long time to come to grips with that.

00:18:28 Brian Faust

But yeah.

00:18:28 Brian Faust

That's part of life.

00:18:30 Anthony Carl

Yeah, obviously I don't know anything about marriage at my age.

00:18:33 Anthony Carl

But it makes you wonder, like, how many people are in unhappy marriages or unhappy relationships just because of like the sunk cost fallacy.

00:18:42 Anthony Carl

And how much happier could they be if they just switch gears, started pushing a new snowball down that hill?

00:18:48 Brian Faust

Yeah, I mean, I don't think there's the right answer.

00:18:50 Brian Faust

Right?

00:18:50 Brian Faust

Like, neither of us are going to sit here and say, you know, what people should do.

00:18:53 Brian Faust

Yeah, there's a great quote.

00:18:55 Brian Faust

The grass is always green where you water it, you know, you have to kind of toe the line.

00:18:59 Brian Faust

You know, when you think about anything, right, like where you put your energy, you know you're going to see potentially results, But yeah.

00:19:06 Anthony Carl

Maybe like watering, you know, relationship that you feel like you can't get out of, or maybe that you're not happy.

00:19:13 Anthony Carl

And maybe what you need is just some consistency in something that you think is broken, and that could go a long way with compounding.

00:19:20 Anthony Carl

The principle could be applied anywhere really.

00:19:23 Anthony Carl

Maybe unhappy marriages just need to, or really anything.

00:19:28 Anthony Carl

I don't want to like put any particular emphasis on unhappy marriages.

00:19:32 Anthony Carl

It's just an arbitrary example, but maybe unhappy marriages need like watering in in their relationships.

00:19:40 Anthony Carl

That could actually solve it that way rather than switching gears again.

00:19:44 Anthony Carl

Just choosing the right things and.

00:19:46 Anthony Carl

Knowing when to quit and then knowing when to, just stay consistent.

00:19:50 Brian Faust

Yeah, one of the greatest predictors actually, in happy relationships, from what I've read in my experience, is just doing little things that show you care.

00:19:58 Brian Faust

Go a long way to building trust and building love and you know those little things go a long way.

00:20:04 Brian Faust

In any relationship, whether it's, you know, romantic or friendships or things at work, right, like showing up and showing you care goes a long.

00:20:11 Brian Faust

Way to building trust.

00:20:13 Anthony Carl

Yeah, I can speak to that on a personal account sometimes.

00:20:16 Anthony Carl

It like in some of my friendships.

00:20:18 Anthony Carl

I've had some rocky times and I found that.

00:20:21 Anthony Carl

Just the tiniest things of like going up and showing appreciation to your friend and kind of doing making little efforts to keep them in the loop and reach out.

00:20:30 Anthony Carl

Those things make a huge difference.

00:20:33 Brian Faust

Where you water, the grass grows.

00:20:35 Anthony Carl

Yeah, I hope we're kind of painting the picture here that this principle really can be applied to anything. You know, we had the bikers, they did that little 1%, they just changing the pillows and changing the the gears on the bike.

00:20:47 Anthony Carl

And it applies to relationships, it applies to money, it applies to everything.

00:20:52 Anthony Carl

Just if you if you put in that consistency over time, it's more about doing it over time.

00:21:00 Anthony Carl

It turns into this huge avalanche of success and results.

00:21:06 Anthony Carl

Good or bad.

00:21:07 Anthony Carl

Good or bad.

00:21:09 Brian Faust

Yeah, I mean, you've mentioned money there and you know, one of the most famous investors is Warren Buffett.

00:21:14 Brian Faust

You know, he's a really an investor, but the simple principle that he always looks back on when people ask him what made him so successful, you know, he always says it's not timing the market and knowing when to get in.

00:21:26 Brian Faust

It's getting into being there for a long time.

00:21:28 Brian Faust

So it's.

00:21:28 Brian Faust

Time in the market versus timing the market.

00:21:32 Anthony Carl

Yeah, and and Warren Buffett to even really blow up this compounding thing. Warren Buffett made like $80 billion in like, the past 10 years of his life.

00:21:42 Anthony Carl

Like something crazy like that, that that's a guess, but it's something around that figure where like the majority of his wealth was made in.

00:21:50 Anthony Carl

The latter periods of his investing journey just like totally exploded with results.

00:21:56 Anthony Carl

So if you think about it, the longer you stay in the game.

00:22:00 Anthony Carl

And the longer you show up, 90% of life is showing up, Woody Allen.

00:22:05 Anthony Carl

The longer you're there.

00:22:07 Anthony Carl

The more, the more time to create those huge, astounding results.

00:22:11 Brian Faust

Yeah, I mean, you hear people talk about retiring who get close in there, like maybe they don't have what they were hoping to.

00:22:17 Brian Faust

Have you know, and it's like, oh, when did you start investing and you know your 401, 401K, 4O3B?

00:22:22 Brian Faust

Oh, just ten years ago, you know.

00:22:25 Brian Faust

Somebody who starts young, you know it doesn't take much when you start young.

00:22:29 Brian Faust

Just building over time.

00:22:30 Brian Faust

Super important.

00:22:32 Anthony Carl

Yeah, and you know my.

00:22:33 Anthony Carl

My like startup Lens is coming in here.

00:22:36 Anthony Carl

Here you know time in the game doesn't necessarily need to be just like this linear.

00:22:42 Anthony Carl

Oh, am I doing it every day?

00:22:44 Anthony Carl

Am I doing it once a week that I think the interval that you do things in, the amount of time that you do things also contributes, like the total amount of time in the game?

00:22:53 Anthony Carl

So maybe you can change the frequency of the amount of times that you do things.

00:22:57 Anthony Carl

So let's say let's say you do something.

00:22:59 Anthony Carl

Three times a day, then you're allocating a total of a lot more time and allowing that compounding interval to be.

00:23:08 Anthony Carl

Much more condensed and much more at a much faster rate.

00:23:11 Brian Faust

Yeah, if you.

00:23:12 Brian Faust

Get paid, you know, a dividend on something weekly versus once a quarter or once a year, you're going to see a lot more results.

00:23:20 Brian Faust

Even if it's the same number over the course of the year, getting it faster actually compounds it quicker.

00:23:26 Anthony Carl

Exactly. So that's so when we say time involved that includes all the time that you put into something and to kind of demonstrate this again one more time, the idea of concept of compounding if a 25 year old started investing $200.00 per month.

00:23:43 Anthony Carl

Assuming 6% return by the time they turn 65.

00:23:47 Anthony Carl

They'd have a nest egg worth $393,000.

00:23:51 Anthony Carl

But if they'd.

00:23:52 Anthony Carl

Waited until 35 to start investing $200.00 a month. Even with the same rate of return, they'd end up with about half of that, with $200,000 by the age.

00:24:01 Anthony Carl

Of 65.

00:24:02 Brian Faust

Yeah, so double.

00:24:04 Anthony Carl

Double just by just by starting earlier so that they had an additional 10 years time in the game and they had doubled the results with less total input.

00:24:15 Brian Faust

You can run the numbers a bunch of different ways.

00:24:16 Brian Faust

You can start earlier and stop and still have more than someone who invests a lot more later in life.

00:24:22 Brian Faust

For the listeners out there, what's the one area that you're going to care about 10 years from now, 20 years from now, that you really want to spend your time compounding on?

00:24:31 Anthony Carl

Yeah, how can you make that?

00:24:34 Anthony Carl

Easy for yourself.

00:24:35 Anthony Carl

Get involved.

00:24:36 Anthony Carl

Just make sure you're doing it every day.

00:24:38 Anthony Carl

Yeah, we would love to hear it.

00:24:39 Anthony Carl

Reach out to us.

00:24:40 Anthony Carl

We promise we will get back to you if you reach out, and we're looking forward to hearing from you.

00:24:45 Anthony Carl

Thank you everybody for tuning in today.

00:24:47 Anthony Carl

If you made it this far.

00:24:48 Anthony Carl

We love you.

00:24:49 Anthony Carl

Can't wait to see you in.

00:24:50 Anthony Carl

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00:24:51 Anthony Carl

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00:25:00 Anthony Carl

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00:25:03 Anthony Carl

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00:25:05 Anthony Carl

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00:25:06 Anthony Carl

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00:25:14 Anthony Carl

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