The Power of Compounding

I am convinced that an exceptional life is determined by how wisely we invest our time.

The Best Question Ever, written by Pastor Andy Stanley, points out there is a cumulative value to investing small amounts of time in certain activities over a long period of time. I would emphasize the combination of two words: “cumulative value.”

Cumulative value has application to every area of a person’s life. For example, we know there’s clearly a cumulative effect if you exercise 35 to 45 minutes a day, five days a week, over a 40-year period. This consistent, disciplined activity is in stark contrast to a sedentary life over that same period of time.

It’s important to note, however, that the value of physical exercise is not found in any one particular day. Exercise has a compounding effect. It’s the consistent, incremental investment of time that makes a lasting difference.

This is also true if you are investing in relationships, your spiritual life or in your finances. It was Albert Einstein who said, “Compound interest is the most powerful force in the universe.”

In Darren Hardy’s book The Compound Effect, he shares the illustration of the magic penny.

If you were given the choice of receiving $3 million in cash right now or a single penny that would double in value every day for 31 days, which would you choose? Most people impulsively choose the $3 million in cash. But, if you chose the penny, on day five you would have 16 cents, and on day ten $5.12. After 20 days, with only 11 left, you would have $5,243. This is when the power of compounding begins its rapid ascent. On day 31, you would have $10,737,418.24.

Pennies seem so insignificant, even when they’re doubling in value in the first few days. It is only with the passage of time that a paltry penny becomes a vast amount of money. Hardy says few things are as impressive as the magic of compounding pennies, and what we don’t realize is that this same compounding force is equally powerful in every area of our lives.

The cumulative effect of investing small amounts of time in carefully chosen activities over a long period can best be understood in The Daffodil Principle, created by Jaroldeen Edwards.

Several times my daughter had telephoned to say, “Mother, you must come see the daffodils before they are over.” I wanted to go, but it was a two-hour drive from Laguna to Lake Arrowhead. “I will come next Tuesday,” I promised, a little reluctantly, on her third call.

Next Tuesday dawned cold and rainy. Still, I had promised, and so I drove there. When I finally walked into Carolyn’s house and hugged and greeted my grandchildren, I said, “Forget the daffodils, Carolyn! The road is invisible in the clouds and fog, and there is nothing in the world except you and these children that I want to see bad enough to drive another inch!” My daughter smiled calmly and said, “We drive in this all the time, Mother.”

“Well, you won’t get me back on the road until it clears, and then I’m heading home!” I assured her.

“I was hoping you’d take me to the garage to pick up my car.”

“How far will we have to drive?”

“Just a few blocks,” Carolyn said. “I’ll drive. I’m used to this.”

After several minutes, I had to ask, “Where are we going? This isn’t the way to the garage!”

“We’re going to my garage the long way,” Carolyn smiled, “by way of the daffodils.”

“Carolyn,” I said sternly, “please turn around.”

“It’s all right, Mother, I promise. You will never forgive yourself if you miss this experience.”

After about 20 minutes, we turned onto a small gravel road and I saw a small church. On the far side of the church, I saw a hand-lettered sign with an arrow that read, Daffodil Garden. We got out of the car and each took a child’s hand, and I followed Carolyn down the path. Then, we turned a corner of the path, and I looked up and gasped. Before me lay the most glorious sight.

It looked as though someone had taken a great vat of gold and poured it over the mountain peak and its surrounding slopes. The flowers were planted in majestic, swirling patterns– great ribbons and swaths of deep orange, white, lemon yellow, salmon pink, saffron and butter yellow. Each different-colored variety was planted as a group so that it swirled and flowed like its own river with its own unique hue.

There were five acres of flowers. “But who has done it?” I asked Carolyn. “It’s just one woman,” Carolyn answered. “She lives on the property. That’s her home.” Carolyn pointed to a well-kept A-frame house that looked small and modest in the midst of all that glory. We walked up to the house. On the patio, we saw a poster. “Answers to the Questions I Know You Are Asking,” was the headline on the sign.

The first answer was a simple one: 50,000 bulbs, it read. The second answer was “One at a time, by one woman. Two hands, two feet, very little brain.” The third answer was “Began in 1958.”

There it was, The Daffodil Principle. For me, that moment was a life-changing experience. I thought of this woman whom I had never met, who, more than 40 years before, had begun–one bulb at a time –to bring her vision of beauty and joy to an obscure mountaintop. Still, just planting one bulb at a time, year after year, had changed the world. This unknown woman had forever changed the world in which she lived. She had created something indescribable: magnificence, beauty and inspiration.

The principle her daffodil garden taught is one of the greatest principles of celebration. That is, learning to move toward our goals and desires one step at a time–often just one baby-step at time–and learning to love the doing, learning to use the accumulation of time. When we multiply tiny pieces of time with small increments of daily effort, we, too, will find we can accomplish magnificent things. We can change the world.

“It makes me sad in a way,” I admitted to Carolyn. “What might I have accomplished if I had thought of a wonderful goal 35 or 40 years ago and had worked away at it ‘one bulb at a time’ through all those years? Just think what I might have been able to achieve!”

My daughter summed up the message of the day in her usual direct way. “Start tomorrow,” she said.

It’s so pointless to think of the lost hours of yesterdays. The way to make learning a lesson of celebration instead of a cause for regret is to only ask, “How can I put this to use today?”

How do you change the course of your life? How do you live an exceptional life? Learn to use the accumulation of time. Multiply tiny pieces of time with small increments of daily effort and you can accomplish magnificent things.

But, you must put this to use today.

If we do not seize and take hold of our limited time, then our days will continually be devoured by random, unproductive activities that ultimately add up to a lot of wasted time. Novelist Robert Heinlein said, “In the absence of clearly defined goals, we become strangely loyal to performing daily trivia until we become enslaved by it.” Because our time is, in fact, our very life, if we waste our time, we will waste our lives.

Furthermore, it is essential to grasp that, if we do not invest regular amounts of time into the important activities of life, the effects of compounding can work in reverse. Neglect is like an ever-growing snowball that has a cumulative negative effect. It can lead to a vicious downward spiral, bringing tremendous pain and disappointment into our lives.

The most important areas of your life require regular deposits of time as the years go by. If you miss these opportunities, they are lost forever.

The message in this book is taken from one of Richard’s books, Wisdom: Life’s Great Treasure.

Richard E Simmons III is the founder and Executive Director of The Center for Executive Leadership and a best-selling author.


Add grace and understanding to your day with words from Richard E. Simmons III in your inbox. Sign-up for weekly email with the latest blog post, podcast, and quote.

Fill out the form to receive wisdom in your inbox from Richard E. Simmons III.