Three Thought Thursday

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Dear Reader,

This week, I came across an Instagram reel from a creator I enjoy, discussing the importance of investing while you're young due to the power of compound interest.

Compound interest is often referred to in the finance and investment field as this magical phenomenon where math, combined with time, dramatically increases your money if you invest consistently. Pretty crazy, I know.

However, the idea of compounding and compound interest got me thinking about how this concept can be applied in areas outside finance and money. Which is where we land today.

Compounding—that's the theme for this Three Thought Thursday.

The Compound Effect of Skills

He started building his skills at the age of four. Yo-Yo Ma is now a globally renowned cellist, born in Paris in the mid-50s to Chinese parents. There, he began studying the cello, and when he was old enough, he moved to the U.S., enrolling in great schools like Juilliard and Harvard. Over the years, Yo-Yo Ma has become one of the most celebrated classical musicians of our time, with an illustrious six-decade career. He has accolades out the wazoo—over 100 albums, multiple Grammys, and works not just in classical music, but collaborations across jazz, bluegrass, and world music. Yo-Yo Ma has become such a prolific icon in the classical music industry because, at almost 70 years old, he's had 66 years of compounding a single skill—the cello. When you compound skills, they stack on top of each other. 95%—yes, I look at the stats—of you who are reading this haven't even lived 60 years of life yet. Yo-Yo Ma has been able to compound his skill for 60 years, making him one of the most iconic classical musicians of all time and easily the best cellist to ever live.

Compounding a skill will make you a master at your craft.

The Compound Effect of Reputation

Could you imagine entering into politics and leaving with a better reputation? Seems impossible in this day and age, but Angela Merkel, who served as the chancellor of Germany from 2005 to 2021, is the living representation of the powerful effects that compounding can have on reputation. She was widely regarded as one of the world's most powerful and influential leaders during her tenure. Merkel was pragmatic, cautious, and firmly committed to stability. Interestingly, she had a background in physical chemistry, which she used to take a more methodical approach to problem-solving, relying on data and evidence. She was a central figure in the European Union, advocating for unity and collaboration. Merkel left a legacy as a leader who consistently placed stability, reason, and the welfare of Europe and the world at the forefront of her policies. When you keep stacking a reputation of stability, unity, and reason over 20 years, your reputation will be greatly enhanced—just as Angela Merkel’s was.

Reputation can be greatly enhanced with small, compounding inputs.

The Compound Effect of Habits

Who knew so many stories could come out of the state of Maine? Stephen King is no stranger to this idea. He's one of the most prolific authors of modern horror, having published over 60 novels, many of which have been adapted into successful films and television series. But King demonstrates what happens when you marry compound interest—the power of compounding—with habits. Specifically, a single habit. King attributes much of his success to the discipline of his daily writing habit. He writes roughly 2,000 words every day, even on holidays and birthdays. Could you imagine Stephen King, born in 1947, approaching his 80th birthday, with nearly 60 years of writing 2,000 words daily? That's just because of one habit. This habit has allowed him to compound into an epic writing legacy. Due to this compounding habit, King has been able to permeate pop culture through the quality of his work, which stemmed from the quantity of his habit, continuing to thrill and terrify readers across generations.

Habits leverage volume. Volume creates quality.

Grateful for you,

Tommy

P.S. Can you do me a favor if you learned something new in this edition? Forward this letter to a friend who may not know about one of these three stories.