Win More by Doing Less: The Power of Compounding
Why Compounding Is the Core Engine of every progress.
Recently, I’ve written an article covering why Life is a badly designed game, listing a few traits that life & games have in common. I have been interested in these concepts isnce I started to study biographies of successful people, because I’ve noticed very interesting patterns.
There are 2 types of successful people. PERIODICALLY & CONTINUOUSLY successful one.
Periodically Successful Person
The first type of successful person is is PERIODICALLY successful one. There are periods, where they have extreme or significant success, and others, when they bancrupt, loose everything they’ve built and they start over.
It’s extremely visible in the investing world. Around 95% of traders loose all the money long-term. You may hear about very successful trades, but they’re usually made BY DIFFERENT PEOPLE over time.
Here is the example what it means:
Today I get rich
Tomorrow I get bancrupted, but you’ll get rich.
The day after, you’ll get poor again, and someone else will have the trade of life.
However, we only hear about spectacular successes. The second part of the story is usually hidden.
But where is the hidden trouble? The first type of person, need to start over, again and again, to reach the same level of success they’ve already did in the past.
I’m not interested by that. And if you neither, keep reading!
Continuously successful person
In this article and in General, I’ll mostly talk about the second type. A person who is more and more successful over time, instead of starting over and over again.
Extraordinarily successful people rarely start from scratch. During the span of their lives, they perform smart actions that compound over time. For example, investing allows you to use the money you’ve already earned to multiply future results.
Over time, to achieve the SAME results, you need to put LESS effort. If you wish to continue pushing hard, the effects will keep multiplying.
But for that, you can’t lose that money you’ve already earned. You need health you’ve already got. You need people you’ve already helped to. And this is what I’d love to stick with you.
0 times infinity is still 0
How you’re being tricked by games
Nothing meaningful is linear. Look at games. XP, skills, gear, territory, influence - all compound. If you want to reach the next level in-game, XP feels slower the more you progress, because the progress bar stays the same while the required points explode.
Progress didn’t slow - your scale did.
If you already block 98% of incoming damage, an extra 1% doesn’t reduce damage by 1%. It cuts what’s left in half.
That’s compounding.
Progress scale change awareness
I know, the example with defense % in games can be seen a bit odd, but Life works the same way!
Here is the chart showing Bitcoin’s price over time (Black Line).
Let’s say, I’ve:
Bought 1 Bitcoin in 2015, for $300.
Sold it in 2018 for $10k.
I’ve have got 33x of return!!!
Then compare that with this situation.
Let’s assume, I’ve:
Bought 1 Bitcoin in 2022, for $20k.
Sold it in 2025 for $120k.
In that scenario, I’d earn “barely” 6x of profit.
In the first example, I’d earn $9,7k, in the second: $100k
It’s not visible from the chart, because THE SCALE IS CHANGING.
If I’d change the chart to linear to keep the scale, we’d see how much of a shift had been done recently.
The progress does not slowed down - it accelerates. To the point, people need to adjust scale, so the early progress is still visible.
Make a lever from compounding.
Earning first $100k takes forever, but second is way easier.
If you are aware of the scale not being linear, you’ll quickly notice that the jump from $1M to $10M is only 10x while getting your first million if you have a dollar - ONE MILLION TIMES.
However, this 10x is far greater progress, if you’ll keep the scale LINEAR.
The compounding effect gets crazy when it comes to your health, reputation and network too! Help enough people for long enough and the effect becomes exponential.
Here is a useful rule to Remember:
Small advantages held long enough dominate big advantages held briefly.
Unfortunately, people quit both right before compounding starts to matter.
Don’t be like them.
Next week...
Next week I’ll cover why early progress is boring by design, so make sure you subscribe for future deep dives!
If that idea resonates with you, please let me know in the comments and share this article with your friends!
Let’s Engineer the Wealth together!
Great read, thank you for sharing.