March 3, 2022
 min read

Mind Macros 06: Compound habits, independent thinking, and wabi-sabi

Table of Contents

Table of Contents

Hello, friend.

Welcome to another issue of Mind Macros - I hope you find something of value.

Practical Advice

1. The power of compound interest

In finance, compound interest refers to interest on an initial investment. If we invest $1,000 into the S&P 500, by the end of a year, it will have become $1,100 with a 10% return rate. Using the same return rate the following year, the initial amount becomes $1,210. The interest gain is reinvested rather than withdrawn. With time, the principal sum snowballs into a much larger amount. After 50 years, the figure becomes $117,390. If, however, we continue to invest $1000 every year, after 50 years, the end balance would be $1,397,690.

Accumulation Graph

“More than 2,000 books are dedicated to how Warren Buffett built his fortune. Many of them are wonderful. But few pay enough attention to the simplest fact: Buffett’s fortune isn’t due to just being a good investor, but being a good investor since he was literally a child. As I write this Warren Buffett’s net worth is $84.5 billion. Of that, $84.2 billion was accumulated after his 50th birthday. $81.5 billion came after he qualified for Social Security, in his mid-60s.” — From The Psychology of Money by Morgan Housel

Compound interest has undeniable power in finance. However, its application reaches far beyond wealth generation.

2. One-percent daily improvements

“It is so easy to overestimate the importance of one defining moment and underestimate the value of making small improvements on a daily basis. Too often, we convince ourselves that massive success requires massive action. Whether it is losing weight, building a business, writing a book, winning a championship, or achieving any other goal, we put pressure on ourselves to make some earth-shattering improvement that everyone will talk about. Meanwhile, improving by 1 percent isn’t particularly notable—sometimes it isn’t even noticeable—but it can be far more meaningful, especially in the long run. The difference a tiny improvement can make over time is astounding.

​“Here’s how the math works out: if you can get 1 percent better each day for one year, you’ll end up thirty-seven times better by the time you’re done. Conversely, if you get 1 percent worse each day for one year, you’ll decline nearly down to zero.

​“The same way that money multiplies through compound interest, the effects of your habits multiply as you repeat them. They seem to make little difference on any given day and yet the impact they deliver over the months and years can be enormous. It is only when looking back two, five, or perhaps ten years later that the value of good habits and the cost of bad ones becomes strikingly apparent.” — From Atomic Habits by James Clear

Success is less herculean and more like laying bricks. The bricks represent our 'daily disciplines,' the habits we are unwilling to compromise on to achieve our goals. Every action we take is a brick laid on the foundation of our future.

Consider what the habit will compound into as you develop a routine, rather than how it will look on a day-to-day basis. Small daily actions will compound into extraordinary results.

Compound interest does not map exactly the same way with habits as it does with finances, but the underlying principles remain the same. The greatest benefits come at the end, not the beginning, which is why compounding is not intuitive. We're exercising delayed gratification, putting in the effort today to reap the rewards in the future.

When trying to predict how our life will look in the future, Clear suggests imagining what the compounding results of our current actions will be:

“If you want to predict where you’ll end up in life, all you have to do is follow the curve of tiny gains or tiny losses, and see how your daily choices will compound ten or twenty years down the line. Are you spending less than you earn each month? Are you making it into the gym each week? Are you reading books and learning something new each day? Tiny battles like these are the ones that will define your future self.”

Food for Thought

1. Independent thinking

“We suffer from excessive respect. We are taught to admire the minds of astonishing figures such as Michelangelo, Aristotle, Plato, di Lampedusa or Montaigne. We are invited to stand in awe at the achievements of these geniuses, but we are also made to feel that their thought processes must be quasi-magical and their ability to produce the ideas for which we know them ultimately mysterious. But there is a radically different view, suggested by a prescient quote from the American writer Ralph Waldo Emerson: In the minds of geniuses, we find – once more – our own neglected thoughts.

​“What this tells us is that the genius doesn’t have different kinds of thoughts from the rest of us; they simply take them more seriously. We ourselves will often have our own sketchy, hesitant version of their ideas, which is why their works can have such a distinct impression on us. What they present feels surprising and impressive, yet also obvious and right, once it has been pointed out. They clearly and powerfully articulate notions that are already familiar to us because we’ve been circling them ourselves, possibly for years, without properly closing in on them due to our modesty.” — From How to Think More Effectively by The School of Life

Independent thinking is one tenet of a genius. This process requires listening to our inner dialogue and having enough faith to express and develop our ideas in public. Much of this internal narration is ignored in favor of a more articulate quote from a historical figure. Rather than trusting ourselves, we defer judgment to who society trusts. Leonardo da Vinci, Iris Murdoch and Socrates are easier to quote than our intuition.

However, what if it’s precisely in these moments when we close down and censor ourselves that we should be paying closer attention and pulling on our instinctual threads?​

2. Wabi-sabi

“Wabi-sabi is a Japanese concept that shows us the beauty of the fleeting, changeable, and imperfect nature of the world around us. Instead of searching for beauty in perfection, we should look for it in things that are flawed, incomplete. This is why the Japanese place such value, for example, on an irregular or cracked teacup. Only things that are imperfect, incomplete, and ephemeral can truly be beautiful, because only those things resemble the natural world.” — From Ikigai by Hector Garcia Puigcerver

Often it’s the imperfections that give a thing its soul. Wabi-sabi emphasizes character over perfection. Consider vinyl records, film cameras, and other old technologies that had a distinctive character due to their imperfections. In the digital age of perfection, these accidental characteristics are still sought after. Music producers will add vinyl crackles to electronic songs and graphic designers still seek out film blur effects to capture a vintage vibe.

We can find beauty everywhere if we look for it in imperfection.

Quotes to Ponder

1. Anthony de Mello on confirmation bias:

“Are you listening, as most people do, in order to confirm what you already think? Or are you listening in order to discover something new?”

2. Epicurus on desire:

“Do not spoil what you have by desiring what you have not; remember that what you now have was once among the things you only hoped for.”

​Thank you for reading,

Matthew Vere

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