The Power of Compounding

Even at the best of times, I am a terrible procrastinator

So today, when I sat down to write this week’s Newsletter over a cup of hot coffee, I found myself on the ‘BBC News’ website.

Here is a summary of the headlines that distracted me from writing the words you are reading right now:

I’m sure you have also noticed, but headlines like the ones above tend to dominate the news every single day.

It seems that every single day we are told the world is getting more violent, more destructive, more dangerous and more depressing.

But what if I was to tell you that it’s not?

In 2024, the world is actually (more or less) as good as it has ever been.

1) Poverty has and continues to decrease

2) Humans are healthier than ever

3) Life expectancy in every continent is at it’s highest point and continues to rise

4) Renewable energy generation is rising

In fact, there are hundreds, if not thousands of ways that the world continues to improve (no matter what the media would have you believe)

In a recent survey ran by ‘YouGov’, 71% of people asked believed that the world is getting worse

So, the real question is…

Why do we continue to be so pessimistic despite of all the reasons to be optimistic?

I believe the answer to this question is two-fold:

1) Media - We are constantly bombarded by headlines and news articles that tell us things are worse than we could possibly imagine (and they’re only going to get worse).

The problem with today’s media is vast and one I will address in the future, so for now, let’s turn our attention to the second part of this dilemma.

2) Compounding - Good things take time, while bad things appear to happen instantly. Unfortunately, as humans we are relatively impatient. We prefer immediate gratification over slow, gradual improvements and therefore we tend to focus more on the huge, negative headline as opposed to the slow, incremental improvement.

Here’s an example:

If I was to ask you to list something ‘bad’ that has happened in the last 5 years, I’m sure you would be able to relatively easily. However, I am almost certain that the answer on everybody’s lips would be Covid-19. This was a devastating worldwide event, which while it lasted 2+ years, appeared to occur instantly.

Now, what if I was to ask you to give me an example of something good that has occurred slowly over the last 50 years?

I imagine that you would have more difficulty with this question, however that doesn’t mean that there aren’t examples:

1) Deaths from Heart Disease: Since 1950, death rates from CVD have declined 60% (averaging an improvement of 2% per year)

2) Childhood Mortality: The UK Childhood Morality rate in 2023 was 3 deaths per 1000 live births, a 2.48% decline from 2022 (this again continues to improve at a rate of 2% per year)

This shows the power of compounding. Small (almost invisible) improvements can make a huge impact when compounded for weeks, years and decades.

As we start a new week, can you focus on your daily actions and habits? Make sure they align with your goals and take pride in executing them every single day. Remember that while you may not see the results immediately, that doesn’t mean that they will never come.

Never forget the power of compounding (and hey, maybe give yourself a break from watching the news!)