There’s a reason financial planners love talking about compound interest. The idea that small, consistent deposits can snowball into life-changing sums over time is one of the most potent forces in personal finance. We often discuss it because the math speaks for itself: disciplined investing is an effective strategy.
But the more I’ve spent time thinking about compounding, the more I’ve realized something else. The principle that makes your portfolio grow doesn’t only live inside your brokerage account. It shows up everywhere – in your career, in your habits, and in your friendships..
And this year, on Thanksgiving morning, that truth hit hard while running with Judah Katz, a close friend of mine since high school.
Last year, on Thanksgiving morning, Judah and I laced up our shoes and went for a run together. I had been running for a few years, and Judah was just starting to get into it. We huffed and puffed our way to a complete 5K (3.1 miles). We felt accomplished and proud that we got up early, braved a cold morning, and met our goal. This year, Judah and I continued our new tradition and decided to push ourselves to complete a full 10K (6.2 miles). Not only did we finish, but we also ran at a much faster pace than the first year. We didn’t just double our distance; we experienced an exponential level of growth, doing it faster and stronger than before.
When we finished, sweaty and proud of ourselves, something clicked: Our running had compounded.
This did not come easy; we both train throughout the year to become stronger runners. It is the consistency of showing up, being patient, and disciplined that fuels the compounded running results.
Compound interest doesn’t just happen in our 401(k)s; we can experience its benefits whenever we commit to something and consistently show up, putting in the work. Deliberate and repeatable steps, no matter how small, can lead to significant results once the power of compounding takes effect.
That’s when I realized that compounding lives quietly in the background of our lives, quietly multiplying our efforts while we’re busy doing the actual work.
That led me to two observations that I believe apply far beyond running and far beyond investing.
1. Patience Is an Undervalued Skill in Compounding
When discussing compound interest in finance, we typically emphasize the importance of consistency. “Keep investing. Don’t stop. Don’t react emotionally to the market.” And that’s true. But consistency is only possible if you develop patience – a massively underrated trait.
Patience lets you accept slow progress.
Patience lets you keep going when the results aren’t visible.
Patience allows tiny improvements to accumulate quietly in the background.
In finance, patience is what allows a $200 monthly contribution to turn into something meaningful 20 or 30 years later. But patience also strengthens relationships. Judah and I have been friends since high school. That friendship didn’t deepen overnight. It is compounded through countless small interactions – shared jokes, check-ins, life updates, favors, moments that didn’t feel big at the time.
A friendship that lasts decades is just compound interest disguised as loyalty.
The same principle applies to your career. You don’t magically become an expert after one project or one year on the job. You compound skills, knowledge, networks, and opportunities over time.
The world celebrates “overnight success,” but the truth is that most success is the product of patience – the willingness to keep showing up long enough for the compounding to take effect.
2. The More You Chase the Results, the Less You Find Them
This was my second big realization: Compounding rewards action, not obsession. If you spend all your time looking for the results of compounding, you’ll miss the very actions that produce them.
Think about investing. Most people understand the importance of investing consistently, disregarding short-term fluctuations, and allowing compounding to do its work. But what derails investors? Obsessing over daily portfolio movements. Watching CNBC tickers like a stock market heartbeat monitor. Wondering why their account balance isn’t growing fast enough.
Ironically, the more you chase returns, the more likely you are to interrupt the very compounding that creates them.
The same goes for relationships. If you’re constantly measuring the “ROI” of a friendship – who called last, who did more, who initiated plans – you lose the essence of the relationship. Compounding happens through genuine, uncalculated effort.
In other words, compounding comes from the reward for the work you put in – not the goal you chase.
Once you begin looking for it, compounding shows up everywhere:
In Your Habits
A five-minute walk, a single healthy meal choice, reading a page a day – small behaviors compound into significant lifestyle changes. Not immediately. But inevitably.
In Your Career
One conversation leads to an introduction. One project builds a new skill. One risk creates a new opportunity. Careers don’t advance linearly; instead, they compound.
In Nature
Trees grow rings year after year, each layer building quietly on the last. Forests regenerate. Ecosystems build resilience through small, incremental changes. Compounding is literally built into the design of the world.
In Your Family Life
A bedtime story, a weekly ritual, a thoughtful gesture – these tiny deposits create lifelong bonds. Small interactions, repeated consistently, create the kind of family memories that matter most.
How This Applies to Your Finances
Of course, this is still a financial blog. And yes, the mathematical reality of compounding in your retirement accounts is one of the single most essential tools for building long-term wealth. However, what we repeatedly see in financial planning is that compounding doesn’t just build portfolios; it builds lives.
When clients invest consistently over time, the money grows. Still, something else grows too: confidence, clarity, stability, and the space to make future decisions from a place of strength rather than stress.
That’s the real benefit of compounding. Not just the financial return, but the emotional return.
The same dynamic is also true outside of finance. The more consistent you are with small, meaningful actions in your relationships, your health, and your career, the more you create a life that compounds in value.
This Thanksgiving run with Judah reminded me of something simple: Compounding is everywhere if we’re patient enough to let it work and humble enough to focus on the work rather than the outcome.
Whether you’re investing money, building a friendship, developing a skill, nurturing a habit, or growing your career, the formula is the same:
Small actions.
Repeated consistently.
Over long periods.
Without obsessing over immediate results.
That’s where the real magic is, both in your portfolio and far beyond it.
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