The 8th Wonder Of The World – Compound Factor

Want to make millions, tens of millions or even billions?

Want to get ripped and muscular?

Want to be the top 1% of your field?

Then read on because I’m going to reveal the ONE THING that can make it all happen.

One of the most powerful quotes of all time is from Albert Einstein:

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” 

Virtually every major accomplishment in life comes from the Compound Factor.

Most of us know the power of compound interest on money. But as you’ll see, the compound factor is the key to ALL accomplishments: physical, career, relationships and more.

Let’s start by showing what happens with money when it’s compounded over time. As you can see in the chart below, $10,000 turns into $452,592 within 40 years at 10% interest.

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In order to really HIGHLIGHT the power of Compound interest over time…

How much more would you have earned if your returns went from 10% to 11%?

How about an extra $198,000.

How much more would you earn going from 11% to 12%?

How about an extra $280,000.

How about from 12% to 13%?

That’s an extra $397,000.

The compound factor is how Warren Buffett became one of the richest men in the world. He averaged double digit returns for decades.

Here’s how much you would your $1,000 would be worth today depending on which year you invested:

compound factor

Is the compound factor only for money?

Absolutely not.

Let’s take a look at the last part of Einstein’s quote: “He who understands it, earns it … he who doesn’t … pays it.

What he’s saying here is, everyone is experiencing compound interest in their lives. You’re either aware of it and you harness the power of it… or you’re NOT aware of it and you’re paying the price.

Health is one of the best examples of this.

Let’s imagine you have identical twins. They both weigh 200 lbs at 20% bodyfat (which means they both have 40 lbs of fat).

Twin 1, eats a calorie surplus of 200 calories a day and doesn’t exercise.

Twin 2, works out every day, eats well and on average burns 200 calories a day.

How much is 200 calories? A 200 calorie surplus could come from 2 eggs or 1 chocolate bar or 2 apples.

And a 200 calorie deficit could come from about 15 to 25 minutes of exercise (depending how hard you train).

Here’s the trajectory they’re going to achieve:

3

So twin 1 now has 60 lbs of fat and his bodyfat is over 27%. Twin 2 is now looking great at 10.8% bodyfat.

That’s the COMPOUND FACTOR of just 1 year.

One year ago, they were the same… and now there’s a 40 pound fat difference between them. The gap that gets created between those who harness the power of the Compound Factor and those who ignore it is MASSIVE and grows exponentially.

The Magic Question

The compound effect is working FOR YOU or against you in every area of your life.

Here’s the MAGIC question you should constantly be asking yourself when evaluating your habits and behavior: “What’s the compound effect of this habit?”

This means you need to “play the tape forward” in your head and see both trajectories.

What happens if I build this habit. What happens if I don’t build this habit. And then make conscious decision.

Let’s take a look at a few key areas and break down how you can apply the Compound Factor.

Learning

Your neural net of knowledge is either growing or shrinking. When you fire neurons frequently in the brain, they get stronger. When you don’t activate the neurons in your brain, the connections get weaker.

Anyone who’s tried to learn a language with a half-ass effort knows this.

My native tongue is French. I’m also fluent in English and Spanish. At one point, I also learned some German and Japanese. Since I rarely use those languages, they’ve faded deep.

Are you constantly feeding your brain NEW information?

When you do, you reactivate old information and expand your neural net.

Imagine cloning yourself. And in 20 years from now, your clone learned new things for 15 minutes a day and you did nothing.

Your clone will have 1825 hours of learning — where will his brain power be? At what level will his insights be?

You can bet BIG that he would outcompete you in many situations.

Your Career Skills

If you want to constantly make MORE MONEY, continuing to strengthen your skills is the best way.

Kobe who just blew everyone’s mind by scoring 60 points in his retirement game is a perfect example.

He showed up at 5 a.m. and left practice at 7 p.m. … in high school.

That’s the compound factor in action right there. He started making gains from high school and never stopped improving.

Kobe Bryant’s weakness was 3 pointers. What was his solution? Shoot four hundred 3-pointers in 45 minutes every day.

Many entrepreneurs make the BIG mistake of NOT continuing to sharpen their skills. They don’t TRAIN. They don’t PRACTICE. They just rely on their experience and knowledge.

Gary Bencivenga, possibly the greatest copywriter of all time, said: “Try to improve 1% a week.”

Improving 1% a week does NOT lead to gains of 52% a year. If you COMPOUND 1% a week, it becomes 167% a year.

Don’t get complacent with your career skills. It’s a very expensive mistake.

Sleep

I’ve been obsessed with sleep this year.

I’m obsessed with MAXIMIZING THE QUALITY of my sleep. Why? Because I know the compound effect of it.

DEEP SLEEP and REM are the two most important restorative recovery processes your body goes through.

During deep sleep, your body produces human growth hormone (which helps you burn body fat, build muscle and repair the body).

This is when your brain cleanses itself. During REM sleep, your new knowledge enters your long term memory.

High quality sleep is the key for having a healthy body and brain.

In a moment of clarity, I realized the VALUE of great sleep over time.

I asked myself, “What’s the compound effect of doubling my sleep over the next 10, 20, 30 years?”

Although it’s hard to know for sure… I’m betting that it’s PROFOUND.

I asked myself an even simpler question, “Will great sleep improve my business performance by at least 1%?” That I knew for sure it would.

1% improvement over time is worth hundreds of thousands of dollars (when you compound it).

In fact, I expected that it would boost my performance by 10% to 20%.

So I invested 5 figures to build the ultimate sleep system. I’ll be sharing the details with you soon.

I’ve already doubled my DEEP sleep. And I’m ALREADY reaping the benefits.

I’m more productive, I have more endurance, I wake up with more energy than ever, I’m sharper, my memories have improved, my recovery from my workout is better than ever.

Your Marriage/Relationships

Our relationships and marriages are another great example of the compound effect.

If we constantly invest energy in our relationships, they grow. If we stop, they die.

If you want to kill a relationship, here’s you how do it: COMPOUND RESENTMENTS (the biggest killer), stop asking questions, don’t listen, argue, don’t give affection and ignore each other.

If you want to continue growing a relationship: Giving each other affection multiple times a day… sharing wins… laughing… enjoying entertainment together… going on new adventures… all nurture the relationship.

One book that does a beautiful job highlighting this is: The Compound Effect by Darren Hardy.

Here’s a couple of my favorite quotes from the book:

“The biggest difference between successful people and unsuccessful people is that successful people are willing to do what unsuccessful people are not.”

As one of my mentors, John Carlton says, “You want it… you take it… you pay the price.”

Don’t be one of those people that sits on the sidelines “wanting”, but not willing to do what it takes and get what you want. That’s a sad way to live.

Instead… rise up and put the compound effect to use in your life on a daily basis. Eventually you will reap epic rewards. Here’s how you do it…

“A daily routine built on good habits is the difference that separates the most successful amongst us from everyone else.”

Your long term success comes down to SOLID HABITS.

Keep asking yourself the magic question: “What’s the compound effect of this habit/behaviour?”

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Meet the Author

Matt Gallant

Matt Gallant is a serial entrepreneur who’s collected over 7 million leads in various industries, scientifically tested well over 10,000 different marketing ideas, generate tens of millions of dollars online and built his dream international lifestyle. Matt currently resides in Panama with his beautiful wife.

13 comments… add one
  • Peter Apr 22, 2016, 6:02 am

    Another great post. You combine useful information with an ability to write well so the message gets through. Thank you for being a person of value.

  • Hammad Apr 23, 2016, 1:34 pm

    Matt, been randomly reading your stuff once I see it on my newsfeed. However I think after this post, I will be a regular reader.

    Looking forward to your tips on sleep….

    Now onto the topic of sleep….. That is where I really struggle…I like you drink more than 5 liters of water (minimum). Not sure how I picked up the habit but I have had it forever.

    However the downside is a lot of washroom trips…Couple of times in the night too which I guess results in my choppy sleep…Would be keen to get your views on how you overcame that?

    • Matt Gallant Apr 23, 2016, 4:36 pm

      Thanks Hammad! I will cover all aspects. It will end up being a book by the time I’m done. Lol

      • Hammad Apr 24, 2016, 10:41 am

        Looking forward to it lol

  • James Avetta Apr 23, 2016, 3:14 pm

    Good read…Keep them coming I enjoy them, their informable and motivating.

  • Thomas Fouts Apr 23, 2016, 4:00 pm

    Very interesting and enlightening post. I guess I never thought of it that way but it makes perfect sense. It’s something an alert person may know, as it is common sense to a higher degree.

    Thanks Matt for “waking” me up!

  • Kasandra Jewall Apr 23, 2016, 5:09 pm

    You have Best Perspective Content ~I Love your Posts.

  • Jonathan Apr 24, 2016, 6:39 pm

    Great stuff as always Matt. I love reading your posts and learning from you. Thank you!

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