Timothy Ferriss, author of "The Four Hour Work Week", asked recently in his blog if we can compound time as we can compound interest. Here are my thoughts on the subject:
Can we compound time, as we can compound interest? Money is a medium of exchange that allows us to store the output of our efforts until a time when we wish to use it. Interest is the rent we get for allowing someone else to use that money while we are not putting it to other purposes.
Compound interest is not some form of magic. It merely describes the mathematical concept that when a starting sum is multiplied by a number greater than one, if the product of the multiplication is added to the original sum, and multiplied again by the same or another number greater than one, the resulting accumulated sum grows exponentially, rather than linearly.
Perhaps compound interest could be viewed as a mathematical expression of the value of patience, or as an illustration of the Law of the Harvest ("as you sow, so shall you reap").
Although it appears that interest can be compounded infinitely, no one individual can benefit from compound interest for a greater period than his or her lifetime. And as Warren Buffet can attest, as the accumulated sum resulting from compound interest grows very large, it becomes more and more difficult to find a single entity that wishes to pay the same rental rate one could get for the use of a smaller sum. In fact, when the invested sum becomes large enough, some portion of it may end up being rented out at multiples LESS than one (that is, a negative interest rate)! And compounding a sum invested at a negative interest rate turns the whole compound interest "magic" on its head!!
So, can we compound time? Tim Ferriss (4HWW) suggests methods for increasing the effective use of one's time in order to reduce the time needed to meet one's basic needs, and suggests putting the time thus liberated to pursuing a positive answer NOT to the question "Am I happy?" but "Am I excited?".
Perhaps as one compounds one's time, the key question one asks is not "Am I happy?", nor "Am I excited" but "Am I making a positive difference in other's lives?" or "Am I making a difference in as many other lives as I am capable of?"
I believe that both Warren Buffet and Bill Gates are real life examples of asking "Am I making a difference in someone else's life?" after having amassed through investment, a sum of money so large that it no longer has any direct relationship to the level of creature comfort (or excitement) one individual can enjoy. Or perhaps it reflects a basic truth that making a difference in the lives of others is a higher form of excitement than can be experienced in any other way.
Look at Tim's involvement in raising awareness and funds for good causes of many kinds.
May I suggest that the ultimate compounding of one's time is moving inexorably, through one's day to day choices of how to use one's money and one's time, toward a place where every waking moment is devoted to improving the lives of others, without thought of personal reward. And the ultimate paradox, I believe, is that if one can approach that level of service and self-effacement, one becomes, ultimately, the best person one can be, which is the ultimate personal reward.
Perhaps John (posted May 8 at 4:53 pm) hinted at just that, when he said that although time is a finite resource, love is not. I define love as a desire for the betterment of another. Can compounding my time and money empower me to compound my love for others?
