Do you want to win a gold medal in the Olympics?
Peter D. Kaufman doesn’t shy away from the big questions.
Yesterday we examined his question: Is there a simple two-word description that accurately describes how everything in the world works?
Today, we will consider a second question: What’s the most powerful force that we as human beings, both as individuals and groups, can potentially harness towards achieving our ends in life?
“The most powerful force in the universe is compound interest.”
So, what exactly is compound interest?
“Compound interest is dogged incremental constant progress over a very long time frame,” states Peter.
Peter is the editor of Poor Charlie’s Almanack, the Wit and Wisdom of Charlie Munger. Charlie is the Vice Chairman of Berkshire Hathaway and has been called “one of the great minds of the twentieth century.”
Like Charlie, Peter is a multi-disciplinary thinker . He suggests we approach questions like this one by looking at “three buckets:” (1) the inorganic universe, i.e. anything that is not living (13.7 billion years old), (2) the biology on Earth (3.5 billion years), and (3) 20,000 years of recorded history.
Peter states: “We go to bucket number one. We ask, what’s the most powerful force in bucket number one? I’m going to quote Albert Einstein again. He said, “The most powerful force in the universe is compound interest.” But that’s not all he said about compound interest. He not only said that it’s the most powerful force in the universe, he said it’s the greatest mathematical discovery of all time. He said it’s the eighth wonder of the world. And he said that those who understand it get paid by it and those who don’t pay for it.”
Next, we look at bucket #2: 3.5 billion years of biology.
“What’s the most powerful force in 3.5 billion years of biology?” Peter asks. “It’s the machine of evolution. How does it work? Dogged incremental constant progress over a long time frame.”
Which leaves bucket #3: 20,000 years of human history.
Peter poses the question: “You want to win a gold medal in the Olympics. You want to learn a musical instrument. You want to learn a foreign language. You want to build Berkshire Hathaway . What’s the formula?”
“Dogged incremental constant progress over a very long time frame,”
“This is the beauty of deriving things multidisciplinary. You can’t be wrong! You see these things lined up there like three bars on a slot machine,” Peter suggests. “Boy, do you hit the jackpot.”
So, what gets in our way?
Reflection: Think of an area in my life where I’ve benefited from taking a long-term perspective. Do I have any upcoming decisions where I should consider giving up immediate benefit for a greater long-term reward?
Action: Journal about the questions above.