Canonical · Compounding & Time · Model

Compounding

Albert Einstein (attrib.) · 1950

"Small advantages, repeated, become enormous."

The idea

Compounding is what happens when returns generate more returns. A 1% daily improvement is 37x in a year — not because each step is large, but because each step builds on the last. It applies to money, skill, reputation, and relationships.

Why it works

The takeaway — recall it first

The Plateau of Latent Potential

"Habits often appear to make no difference until you cross a critical threshold. People quit because they expect linear progress, but compounding is an exponential curve."

James Clear · Book ConceptContinue→