Ep. 165 – The Law of Compounding


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Episode Transcript

Hey what’s up? What’s up? What’s up everybody? Welcome back to THE a.m guys, welcome back to five minute rants. I’m your host, Michael Abernathy. And welcome to the show predicated on the journey of life and business, I hope you’re all doing well, I really do life treat me better than I deserve. Well, guys, today, I wanted to talk about little successes and little wins. And I actually want to talk about how life works this way.

So, to me, life really works according to this law of compounding. And that’s What I’m calling it, I don’t know if it has a better name, somebody smarter than me has probably already come up with something better than this. But I call it the law of compounding. And What that means is when you are walking throughout life, you’re constantly either compounding wins, and successes towards your goal, or you’re compounding unintended consequences, right? Like you’re building up either or. And so if you think about how life works, the goal of life is to continue to repeat successful actions every day, I actually just heard Alex Hormozi say this. And I was like, Man, that’s right on point with What I wanted to talk about today. Because he talked about the goal of life is pretty much to repeat successful actions every day. And it’s like that. So onpoint, because that’s how you win in life.

Because everything massive are big, from Apple to Amazon, and the big company, they are all made up of hundreds of thousands of little wins all across the board globally, underneath the company. If you think about how a plane is made, or car is made, there’s hundreds and thousands of small little screws or wins, right to piece together, the entire vehicle in order for it to work and all of life works that way, like you and I are naturally built this way. And the way we’re built is the way life works. Right? You got atoms, molecules, and the molecules and everything else form Well, I’m skipping a bunch of steps, but then form into cells, and then your body is made up a bunch of cells. And then before you know it, I’ve got a hand, I’ve got an arm. And on this large scale thing, I now have a body all the way from atoms. And so if you think about that, that’s really how life works.

And one of the goals in life is to continue to continue to accumulate the small wins towards your goals, right. And this is why writing down and actually have an architected roadmap for how to get from point A to B is so important for your life and so important for business because it helps you actually see What you need to accomplish to do it. And life is really made up of building blocks like these, I’m going to call them building blocks these wins in order to become successful, right. And the point is, is you continue building on the small successes, and then the outcome of that is the actual, you know, anticlimactic oh my gosh, we actually have this really large entity or this organization, or we actually bought the house that we really wanted, because we saved for it. And then we got promoted at work. And we added to our skill sets. And there’s all these additions of wins across the time.

And oftentimes we get stuck. And when we get stuck, it’s because we’re not actually compounding the small wins over time in that area to move past that area and to move and to accelerate and growth in a new way towards the goal. Instead, we constantly compound unintended consequences, because we’re letting somebody else either tell us What to do, we’re not thinking for ourselves, or we’re not taking care of ourselves, taking care of ourselves. And then before we know it, the unintended consequences have caught up with us. And I’m saying this because the way we’re built the way businesses built is the law of compounding even the way that they measure companies, the way that they measure companies, and they measure entities values, is based off of compounding revenue, and growth. And that’s What it talks about, like if you ever heard anybody, like, Hey, we’re going to appraise this company at a five times multiplier, and different things like that. That’s What they’re talking about is looking overall, internally and externally at the company, everything that’s coming into it, everything that’s going to flow out of it, and then how it’s going to compound the rate at which it will compound over the next five years. And this is What we’re going to multiply the current revenue by and different things as such.

So the point of What I’m saying is this is if you can continue to progress and have little wins every day and continue to actually build upon those, you’re going to end up where you want to be. And the progress is more important than the outcome currently, and this is why I talked about making your bed. This is why I talked about doing the small things because if you’re able to small wins, it’s much easier to add a little win that’s much easier to add another win that’s a little bit larger than the last one you had. Because eventually you will grow in win size from small to medium to large and that itself the size itself will also compound.

Anyways guys, I’m out of time so I’ll catch you later peace


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