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Relationship Habits Compound

I recently taught my kids about the power of compounding. It’s a finance term that refers to the exponential growth of an investment. You invest a small sum of money which earns an annual return that is re-invested and over time, accumulates into a large sum. Compounding has a snowball effect. The chart above demonstrates how saving the exact amount but starting ten years earlier can make a huge difference. Emily contributes 33% more than Dave but ends up with twice as much wealth because of the additional time her money has spent compounding.

Finance bloggers extend the principle of compounding to other areas of life. One example is mountain biking. They write about how a skill can be broken down into various incremental steps or sub-skills. Working on one sub-skill at a time generates a compounding effect. I have been playing basketball for over thirty years. My body has deteriorated in the past decade but I’ve continued to work on my skill set. In my teens, I played as often as poss…

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