123: The Power of Compounding - Valuing Your Time

Life is meant to be enjoyed. Part of that enjoyment comes from experiences that are for their own sake and with little effort, while the other part is from the things that require growth, challenge and difficulty. To access this realm requires planning, foresight and continual action in the now that will only pay its dividends later. A consistent relationship to the future we want to live. Only in this way, we can build momentum and enjoy a created life of our choosing.

Transcript

This is episode 123 the power of compounding treating your time like money My name is Tudor Alexander and this is the dance of life podcast every week My goal is to inspire you to take action towards what you love live a transformed life and enjoy the journey there Are you ready?

Let's go You What's up guys so Albert Einstein one of my favorites and I'm sure one of yours too was quoted as saying Compound interest is the eighth wonder of the world He who understands it earns it he who doesn't pays it.

I I love this quote because today we're talking about the power of compounding and it's not going to be a financial Podcast although we will review a little bit about how compounding works in theory but more to look at the Principle of compounding and how that applies to your actions.

I love Seeing it this way because it really helps you get an idea of how important it is to be consistent In your actions on a daily basis towards what you love,

You know That's one of the main goals with this podcast is to inspire you to continually take action on what you love And that's that's really the key.

So how did this come about?

I was having a conversation with one of my buddies recently and we were talking about You know creating a personal brand right and how you create a personal brand how?

You know how much work it takes and basically why you need to do it and this kind of stuff and really First off the world is moving in that direction,

You know,

If you look at our economy,

It's becoming Much more self-employed,

You know oriented a lot of the freelancer is is now something that you can become much easier than let's say 20 years ago with all the technology and and tools that are available and Education is becoming a disrupted thing,

You know,

We're no longer going to colleges As much as we are before I don't know what the statistics are But I think last I was reading about anything like this Attendance had dropped down quite a bit.

Let's say compared to you know,

20 years ago now with the internet now with podcasts with with online courses all these kind of things that you can enrich your Education with practical skills.

We live in a world where?

Literally,

You know Information is at your fingertips in the Google University.

You can pretty much learn and how many times have you learned?

I know I've learned stuff on YouTube like crazy and it just it still astounds me today You know,

We take it for granted like it's this ubiquitous thing in our life,

But in reality I mean,

I I'm 35 this year.

I grew up when there was no internet.

There was no Facebook and You know,

It just still astounds me that literally you can just turn to a A computer and learn anything you want on your own time.

So it's that's pretty crazy.

That's a huge shift in our Ability to create really if you think about it and in the world today the average person I find this also really interesting the average person we're talking just average has a phone right and just Their ability to command the world's resources if you think about what you can do through your phone We're not even talking about you have a ton of money or anything Let's say an average person average salary.

You got a phone you can communicate across the world to anybody You can go on Amazon and literally order anything you want as long as you can afford it or you can use a credit card Right and bring it to your door in two days you know,

You can talk to people and create things online and groups and motivate people and like On what history has that ever been possible for for the average person?

You know,

Like if you think about royalty,

Let's say a Pharaoh back in Egypt or in a royalty back,

You know 500 years ago or whatever Their power like your power is an average human being with a phone Greatly outweighs like royalty hundreds of years ago We're living literally like like emperors like we have the whole world in our command as far as what we can create and The actions that we can take it's pretty phenomenal So we live in that kind of world and it's exciting it's really exciting because what that means is the value of your actions is much greater Than somebody who was like,

Let's say very very well to do a long time ago Meaning you get a lot bigger bang for your buck and what you can do a peasant Let's say an average person 500 years ago.

They didn't have much You know,

They could do with their actions.

They're a very limited pool of freedom and things that they could create But now the the playing board has been drastically The playing field has been drastically equalized,

You know,

You can do a lot even as an average person with a phone So that's really inspiring to me.

You know that that to me is really cool because you can literally start a business in your Spare time you can you can do so much.

I mean people are drop shipping these days.

They're selling stuff They don't even own like it's crazy.

We live in a crazy in a really cool world But it's a crazy world if you think about it,

You know,

And oftentimes I focus a lot on Gratitude,

Especially recently.

I'm like I said,

I'm coming out with this book in a couple weeks The gratitude map and that's been a big part of my life and it will continue to be But this episode I really want to focus on the other side of it the achievement side right the the taking action To to create that future and it's to me.

It's it's the dance between the two That's what we call the dance of life right the creates your life the dance between achievement and and success and taking action and having a sense of urgency With your ability to be grateful and appreciate every step along the way.

That's really that's the magic formula right there I mean really there's nothing else.

So in this episode I want to talk to you about the effect of compounding on Your actions,

You know,

And why is that important because ultimately in life?

This is what I believe and You can share with me what you believe too.

I would love to hear back from you on this but At the end of the day,

There's two kinds of experiences in life.

There is the stuff that's very accessible and easy doesn't require effort and there's this stuff that requires skill and training and excellence and there's a barrier between Experiencing it and and just having to put in the resources and time and skill and all that stuff and both are important there's a wide spectrum of Experiences available life is about experience if there is one purpose to life,

Right?

It's to experience it to get as much experience as possible in my opinion as much of a variety of different kinds of experiences now Within that it requires a distinction because I can get a variety of easy experiences all day long I can go eat I can go sit outside.

I can go,

You know Whatever lay by the beach.

I mean,

You know anything that doesn't really require Much effort or skill it's all there and all those things are beautiful and very important But I think that a fulfilled life a happy life something that really lights you on fire also involves the spectrum of experiences that are difficult that are requiring challenge and skill and training and excellence so You need both you need both and that's where that variety comes from It's not about just having only one type,

You know,

Or let's say only a series of similar types of experiences You want both you want the challenging and the easy so with the easy you don't have to do much you know,

You just have to let go and relax but with the with the experiences that Require that excellence that skill that are you know miles away between a mote of resistance and space and time With that it requires planning and consistent action because they don't come by default,

You know you can assuming nothing terrible happens to you you can Wake up and tomorrow comes and you can enjoy it in the same way as you did today But if you want a particular result if you want let's say a certain amount of money a lifestyle a certain body You want to travel somewhere super cool like?

That's not gonna come just by default tomorrow.

So there's the default version of life,

Which is excellent But then there's also that extra something special there's ordinary and there's extraordinary and they're both important But this is about creating that little extra in your life and that little extra comes by taking continual Action because we got a point,

You know,

If you want to eat strawberries in the summer you got to plan them in the spring That's just how everything works.

Nothing You know Amazon certainly breaks the rule because you can think of something and literally it materializes in front of your face in 24 hours But that's not how life works You know,

Maybe it will in a hundred years when technology will override most of our effort You know at creating anything in that sense.

I don't know,

You know to that's an interesting little side thought,

Too I've wondered about that a lot in my own Experience is that you know at some point?

We're gonna make things so easy That there'll be no point to doing anything at all Literally you just put on a helmet and let's say you got a virtual reality experience that's just as good as the quote-unquote real life if this isn't a virtual reality experience and That's it you can program the perfect family the per you know,

And then and then what?

You know,

What would be a point to life in that sense?

So that's a very interesting future because Then it would maybe cycle in on itself,

You know,

Maybe at that point we would say,

You know what?

I want a little more challenge I want a little more difficulty because that would be the novel experience at that point and then maybe You end up back where you end up now Alan Watts if you listen to him,

He talks about this.

It's a very mind-blowing thing,

But anyway Back to the topic at hand.

What is compound interest if you don't know?

It's it is the eighth wonder of the world because it's literally making something from nothing so if I put $100 in To a an account and it compounds at 10% interest per year That means that after a year if I've done nothing that $100 turns into a hundred and ten dollars That's money out of thin air.

So what that means is that the next year if I do nothing Right.

I've put my $100 in then it grows a little bit more and it takes that 10% not of a hundred But it takes out of the new amount of a hundred and ten so then it goes to 121 because you got $11 and Then the next year again,

I do nothing.

I have $121.

I take 10% of that That's $12 then I'm up to 132 dollars So in the course of three years,

I've done nothing but I've gained,

You know,

30 32 percent on my investment So now why is this important,

You know in finance obviously because you get money from nothing and that's that's the whole point You know,

You're never gonna earn your way or save your way to financial freedom because at the end of the day You are exchanging time for money and that's that's not what you want to do Regardless of how much money you have you have limited amount of time Right.

So your goal is that you get more than what you put in,

Right?

So you get money from not being there royalties,

You know interest dividends returns stuff that you know Like products that you don't have to be there to sell them that kind of thing so when you have compounding That compounding goes to work for you Every you know,

However,

It's structured but every time that it ticks it gives you a little more It gives you a little more and as you are consistent with your investments The rate at which you earn is much faster than just say I'm earning I don't know $20 an hour,

Whatever right?

It doesn't do that.

It's the rate increases it accelerates Then this is the point because you accelerate Compounding is essentially acceleration as you were to translate into a physical law.

It accelerates so What acceleration does?

Is that it builds momentum the whole point of having a nest egg or an investment?

Situation is that you invest in it regularly?

Right and allow compounding to accelerate that To the point where it has enough momentum quote unquote momentum.

So that you're gonna retire meaning The earnings that you get back From those compound dividends is that it's enough to basically You know live your life on and the level that you see fit So let's say I want five thousand dollars a month to be as my ideal lifestyle,

Whatever,

You know $10,

000 a month twenty thousand whatever it is then I figure out how much do I need in my nest egg for my Interest right that's stuff that's working without me having to be there to return that amount of money back to me It's order is they say,

You know have 30 times 40 times more again This is not a financial podcast,

But there's plenty of stuff out there For you to educate yourself on it's very interesting one book in particular I recommend that I have had great experience with myself is money master the game by Tony Robbins I think that's a phenomenal book Very is a long book.

I'd listen to it on audio,

But it's a it's a phenomenal book.

I highly recommend it very educational but Compounding is really what it's all about.

So now if you understand all that with compounding with money It's the same with time,

You know with money We measure it by dollars with time.

We measure it through action Right the actions that you take on a daily basis,

Right?

So what does that mean?

I was talking to my friend about how building a brand a personal brand whatever,

You know even a regular brand doesn't matter but building a brand is really about compounding I mean putting your actions over time towards a consistent future because it takes time,

You know,

There's just a You know,

Especially when you do something you're gonna be new at it and you're gonna be slow You know just like with compound,

You know with money if you put $100 in a year Right a hundred bucks a year is not a lot of money But if you start early on let's say you start when you're 20 I don't have the number pre calculated for this but in 20 years if you're putting $100 a year and you get back Let's say I don't know seven percent or something like that.

That money is gonna be Insanely huge because it at first it's not so big but it starts to accelerate accelerate accelerate and then it pretty much builds momentum and You know you do that for 40 years and you're gonna be a millionaire.

I'm sure so the point is like the the value of compounding over time is that Yes in the beginning.

It's slow but towards the end it's phenomenally different So that's the same with any business in the beginning It takes a lot of energy and time and effort to start anything you're gonna fail you know,

There's just a wall of like two years in my opinion at least of really Getting clear on what it is.

You want to do with something.

This is in my own experience This is in my other friends entrepreneurs experience.

I see about two years I think you know give or take,

You know one sometimes three years and is for really to get your vision But at the end of the day,

It's a constant process,

But for sure you can count on the first two years Being a trial period you know with my own podcast.

I'll give you a little brief history about this podcast I can tell you how many revisions and creatively,

You know,

How much I rearticulated everything and how like in early 2017 I had the idea for a book and That's when I it was a book.

I haven't written yet and I probably won't write it for another two years or so,

But I started with this book idea it was called the seven transformations and Then at the time in 2017 beginning of 2017 my buddy and I Elijah we started Goofing around with like microphones and podcasting and we had no freaking clue what a podcast we even was You're just recording it and putting on Facebook You know a year goes by 2018.

I'd start my own podcast.

I call it the seven transformations I wanted to talk about personal growth.

I wanted to talk about transformation all this kind of stuff.

I Started that with literally like I think six downloads maybe in the beginning like it was it was nothing I was like,

Okay.

Well,

I guess that's pretty good.

I just kept kept going on it.

I I knew it wasn't anything phenomenal I had no idea what to measure it to either.

So I just kept going with it and Then I created a website for it.

I started creating a blog show notes I had a blog before I changed that,

You know from like two years ago into something that's more aligned with this.

I I started creating,

You know more Podcasts I was trying to do it twice a week Then I got into insight timer a couple months later,

Which is a meditation app and they started liking my content So I started creating some music there and pretty soon,

You know,

Like I said,

It's been now I'm fast-forwarding through a lot of stuff,

But it's now been a year and a half Right,

So we're in 2019 So two and a half years literally since my first book slash podcasting experience kind of started and now I feel Decent I'll tell you I feel done pretty perfectionist,

But I feel pretty good.

I feel decent about what I've come and produced so far with with the podcast with the sound quality with the message with the website with all these little pieces to the puzzle and I I can tell you consistently that in the last year and a half I've spent probably I mean ten hours Maybe no,

Not even like ten You know,

I would say per week maybe 20 hours a week Right like on average maybe 15 to 20 hours a week Just thinking reorganizing the structuring.

I mean creating content if you you average it all out It's probably about 15 to 20 hours a week just on that now remind you mind you I still had My business my coaching my dance performances all that stuff like that all is going on So it's been a grind,

You know,

And it still is a grind.

There's a lot of awesome stuff I want to bring to to you guys and share with you,

But it's a constant grind.

But now I have a structure so the value of that consistent action is that a You need to get through that pool of failure and get that feedback,

Right?

So anytime you start something There's no way it's guaranteed that there's just imagine like there's a hundred failures.

Let's say we put a number on it There's a hundred failures that you have to take for any new endeavor.

I'm making this up.

It's not true It's probably more way more than that.

But the point is let's say there's a number right?

So if you're acting you take one action a day Right just so we can quantify this if you're doing one action a day That means it's gonna take you a hundred days before you get through that pool of failure But if you're taking ten actions a day It's gonna take you ten days Now regardless the fact that that's way faster multiple multiplicative Lee The point is that now you're there sooner and then you can take More action because once you get through those hundred failures,

Then there's more action that you can take whatever the next step is,

Right?

Again,

I'm quantifying this it's kind of a silly example But the point is you take advantage of your time and then the sooner you act you're you're sooner You're you're faster to get more feedback.

So it's it's a snowball effect.

So you have to get through that You know that initial pool of failure and you'll get to meet people Create systems and structures of doing things create a method develop your skill develop your vision and message and it's like You know,

The world is constantly changing.

We're constantly getting opportunities So that the faster you are the more consistent you are taking action The sooner to market so to speak you can get it and start taking advantage of it You know,

It's it's not a linear thing.

The more you take action the the more exponentially you grow.

So that's really the key with compounding and You know in my own experience,

Like I said,

It's been a it's been a it's been a grind,

You know But I'm always reminded by the consistency the value of consistency that's something I talk a lot about in this podcast and I'll tell you I saw a video recently of a Of a tortoise and a hare.

They actually did this on Facebook.

It was pretty entertaining I think it was in some Asian country somewhere,

But they had a turtle it was Running,

You know,

They had like a little race track.

It was just a straight track It was such a cool video.

Like I wish I could find the link.

I'm sure you could google it but is literally the tortoise versus the hare and it's Exactly how the cartoon portrayed it like the tortoise is just literally going straight and just plowing away super slow but just going straight and the the people let go of their bunny rabbit and the bunny rabbits like Literally in the first three seconds.

He almost wins the race He gets really close and then he you know He jumps back and you know goes back here and then he's confused and he's running around.

He's just bouncing around all over the place What meanwhile the turtle is just going straight.

It doesn't veer off course So it was a really cool video because the tortoise actually won,

You know,

And it was like wow Like this is it's one thing to see it in a cartoon But to see it in real life,

It's like oh wow,

Like okay,

I get it now,

You know It's all about that consistency.

It's just about it doesn't matter how About how much you bounce around it's about whether you get to the finish line and you're consistent right,

So Consistency is the key now.

How do you take advantage and Compound your actions.

How can you what are some key strategies that I can share with you from my own experience that will help you in Compounding your actions and being more thorough and staying on top of yourself So the first one is get a notebook Forget your phone to do I mean I use my phone.

I got a little notepad or whatever in the phone but Look,

If it's one thing I learned it's like we are physical creatures use a notebook.

I Use two markers I use like a gel pen like a black ballpoint pen and a red sharpie I love first off you get a reward mentally dopamine when you cross off your To-do list when you write something and you cross it off like that's a that's a boost So we're we're hardwired to complete things so the more enjoyable and again tune into your inner child,

You know,

Like Like be be like a kid again.

I bought the huge red marker and it's ridiculous But you know what?

It feels great when I cross that thing off like it feels really good So,

You know experiment with that you don't have to have a red marker,

But do something that's gonna help you get creatively in tune physically in tune viscerally in tune with your to-do list and I literally review it every day like set time for yourself every day to review that to-do list I have a notebook a little black notebook.

I write in it I do my follow-ups whatever what I need to do for the next day and then I cross it off with a red marker and Continually,

I'm rewriting like if I'm getting to the point where I have let's say three or four more Things I need to do on the list,

But there's like 20 that have been crossed off I just flipped the page and I rewrite it again.

So I start fresh so I have this rotating to-do list and I'm constantly interacting with and Obviously you have your phone too,

But you know don't rely on digital if the digital you can't feel anything It's it's all logical brain.

It doesn't you're not gonna remember it emotions remember Logic doesn't remember you gotta remember that emotions.

Remember if you feel something you're gonna remember it It don't overload your brain with think think think logical stuff.

We got plenty of that already.

So don't rely solely on the display of your phone use a notebook leave a physical notebook and Reserve time every day to check in on your to-do list Don't scrimp on that either because if you don't have time for yourself This is very important and this deserves a little more explanation when you're when you're spending time with yourself You have several ways that you can do that.

You know,

You can watch Netflix,

Which is whatever it's fine,

But it's not productive You have creative time Where you're just out in nature or whatever,

You know quiet space and you're just letting the universe speak to you and get inspired thinking about the vision the future creative thought and then you have a Like productive time with yourself where you're reviewing your to-do list.

You're reviewing your tasks.

You're crossing off tasks like those kinds of Quality time with yourself.

You have to have at least once a day in my opinion You have to if you want to stay consistent.

It's like think of it like your investments You know think of like you're putting money in your piggy bank that compound interest bank You know you want to maximize your compound interest and you got to put money in it every day or every month or on a?

On a schedule,

Right?

So the same thing with this your piggy bank is your notebook and you got to invest in it every day And write in it every day and cross out every day Third on the list is delegate,

You know learn Learn to delegate this is going to help you free up your time so that you can keep working on creative stuff one thing that's important to note with Being let's say really taking action and compound interest all stuff that we're talking about it's very easy to get derailed on the details and Spend it,

You know a lot of time on Doing useless stuff,

Especially if you own a business or whatever,

You know anything else It's easy to get lost and say yeah,

I've I've done a lot today But all that stuff is really useful useless towards your end goal your end vision so Just because you're doing a lot of stuff doesn't mean you're being productive.

That's important.

So what does that mean?

That means delegation allows you to Re-center to let go of those details that don't need your attention so you can actually invest Where the compounding is the highest now,

Here's a good way to think about it.

Let's say you have Three accounts that you can invest in one of them gives you 10% One of them gives you five and the other one gives you 1% okay,

So the part that's gonna return the most is your vision your why your you know,

Your ideas your creative stuff you Start investing your attention in areas like all the details.

Let's do especially stuff that you don't know how to do.

Trust me I've been there like I'm control freak So took me a while to learn a delegate and especially like with example for this book that I'm coming out with I got an illustrator.

I got you know an editor.

I'm talking to a marketing pretty like so many things that I wanted to do and Certainly,

I'm very creative in that sense.

Like I know what I want,

But you have to delegate Otherwise you just spin and spin and spin and you invest that time into the 1% piggy bank you're not gonna get anything in return you you if anything you'll lose because People who are experts in that field can do it faster and Can offer you ideas that you maybe you didn't see so learning to delegate allows you to keep your attention and Your investment in the right piggy bank.

So that was really important learn to delegate It's been a huge lesson in my life number four Decide how to use your time effectively now,

That sounds like a general suggestion but look there's different ways to use your time and you know that there's There's creative kind of time.

There's data entry kind of time.

There's Recovering and rejuvenating yourself,

You know,

There's execution and in getting stuff done Right.

So one thing that's been very valuable for me and I you know,

I want to create I think I'm gonna create a Something with this maybe in the future.

I don't know what yet but some kind of guide or book or something but learning how to align with Your natural state,

You know,

There's a there's a principle in Asian culture called Wu Wei and Wu Wei is Going with the alignment of things going with the grain not against the grain but going with and learning how to align yourself Properly with a situation a person a the flow of something so that you do not waste energy it's very very interesting to look it up,

But That the idea is very simple How can we align you like a sail when you use a sail?

You are using the wind to move Whereas when you're rowing you're using energy your own energy one requires thought and structure and planning and Is subtle but is very very powerful and uses very little of your own energy.

So in that sense How does that apply to your time management?

Well being effective with your time is having a routine number one and also having the sense of how that aligns with Your natural cycles your energy the situation the the level of commitment that's required,

You know If if you know that you like to do creative work at night Let's say you're most creative at night then structure your routine so that you can do your creative work at night.

Don't do task stuff or you know data entry kind of stuff or things that Aren't creative when you're at night and you're getting that creative peak utilize what's already there then you're gonna be effective likewise,

If you know your Whatever most productive in the morning because that's when you have the most free time Don't sleep in You know and then try to play catch-up like if you know,

That's when you have that free time then utilize it So that you can invest in that 10% piggy bank so learning how to utilize your time and aligning with what's already there is very very important if you're Tired don't try to do creative work.

Just cross off your list and see what you can get done that requires very little mental energy so Number one get a notebook to reserve time With yourself to be productive to be creative to listen three learn to delegate for decide how to use your time effectively by having a routine and number five the final one is Ask yourself what you're doing and why you are doing it constantly evaluate your reasons on a regular basis,

You know,

This is something that I Can't stress the importance of and it's something that if you want to get anywhere That's worthwhile again.

We're talking about compounding your actions so that you can get those results and experiences and Things in life that are harder to access Then you have to continually ask where is it that you're going?

What is your vision,

You know with this podcast again?

I'll give you my own story.

I've changed the design the marketing the the branding the wording the structure I've changed it so much in the last like year and a half like crazy if you've listened it from the beginning you can go Actually on iTunes as much as I hate to tell you this Go on iTunes.

You can listen to my first Podcast there and I think it was Taking action to create a life you love or something like that And yeah,

That was my first episode pretty much exactly what we're talking about today But you can see the difference the intro the tone of voice Whatever the quality of sound God and you can be started on that like it's just insane how much everything's progressed You know,

I'm very thankful for that.

I'm thankful for you guys.

I'm grateful for you for you being in my life and listening but that's what it's all about is that consistency and just being able to continually take action and look at what is it that matters to you what direction you want to take it and Evaluate everything else against that point.

So that's how you stay on top of yourself because again,

It's easy to get lost in the details It's very easy.

So you have to keep that big picture ahead of you whether it's making a vision board whether it's listening to inspiring podcasts that kind of guide you in that direction or listening to books that Kind of help support what you're looking to do Hanging out with people having masterminds community groups,

Whatever keep that vision alive so that you can stay Consistently in the same direction You know,

It's one thing to invest in the 10% piggy bank for a little while But then if you start investing in the 1% without realizing you're investing in the 1% and wasting your time Then you're not taking advantage of compounding if that makes sense.

So compounding and the value of compounding master for your life get yourself a notebook and Do it every day.

Here is my takeaway for this episode Life is meant to be enjoyed part of that enjoyment comes from Experiences that are for their own sake and with little effort while the other part is from the things that require growth challenge and difficulty to access this realm requires planning foresight and continual action in the now that will only pay its dividends much later a Consistent relationship to the future.

We want to live only in this way Can we build momentum and enjoy a created life of our choosing?

For more episodes and weekly content stay connected at dance of life.

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Reviews

Your podcast was really insightful thank you 🙏 🤗

Another interesting podcast. Thanks Tudor 💜x