Compounding

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A little over a year ago, I ran my first marathon. I had the race of my life and even qualified for Berlin, the fastest World Marathon Major.

A lot of people ask me what my training plan looked like — “What workouts did you do? How many miles did you run per week? What’s the secret?”

Sure, I suppose doing the right workouts and completing a high-mileage training block mattered. But that race was not made with a single workout. It wasn’t even made with a single year’s training cycle. It was the result of just putting on my running shoes and going out the door nearly every day for the last 10 years.

Relative to the elites in the field, my time really wasn’t that fast. There were guys near the front who finished 30 minutes faster than me. And the reason they were so fast? They’ve been running more miles for even longer and were far more consistent.

I’ve had to take weeks and months off at times, cycling on and off with injuries. But the true elite runners can maintain high mileage for long periods of time, with little to no interruptions.

The secret to becoming a fast runner is simple. Put on your shoes, go out the door, and just run every day for 20 years. Run the most miles that you can sustainably do without getting injured. Stretch, strengthen, and do the little things. Take a day off here and there — just don’t get injured. If you get injured, you’ll have to stop training for an extended period of time and the compounding will stop working in your favor.

This same concept is true for most things in life — writing, other hobbies, our relationships, our careers. To become truly great at something, there are no shortcuts. It requires just doing that thing consistently for a long period of time and stamping out anything that will prevent us from continuing to dedicate our time to that thing.

Warren Buffet has a famous quote that beautifully describes his investment philosophy:

Running is the same way, except rule number 1 is “don’t get injured.”

What investing and running have in common

When we look at how Warren Buffett amassed a fortune of over $100 billion, we’d think he’s some sort of intellectual genius — that he was just born with a gene that the rest of us mere mortals lack.

But the reality is that he isn’t any smarter than other investors. He just has been good at playing the game for longer than anyone else.

Consider this crazy statistic:

99% of Buffett’s net worth was accumulated after his 50th birthday (and ~98% came after his 65th birthday).

If he had retired at 60 (like a normal person) we probably would have never heard of him.

This stat sounds crazy because we humans didn’t evolve to comprehend exponential growth.

If I asked you “What’s 7+7+7+7+7?” you’d know within a few seconds.

If I asked you “What’s 7×7×7×7×7?” you’d take a lot longer to figure it out and probably couldn’t do it in your head.

We understand linear growth because for most of human history we didn’t need to think exponentially. When the average human lifespan was less than half of what it is today, and when our biggest concern was just finding our next meal and living another day, there was no need to think any way but linearly.

If we look at a graph of exponential growth and zoom into the early stages, it doesn’t look too different from linear growth. In fact, linear growth sometimes even beats exponential growth in the short run.

But the longer the time horizon, the more obvious it becomes that these two types of growth are vastly different.

Our brains evolved for a world where realizing the effects of compounding beyond those early stages (where the two are almost the same) wasn’t necessary.

Compounding is not just a financial thing

Most thinking goes:

“How can I earn the highest returns?”

“What does the training program look like to run a fast marathon?”

And there’s some merit to asking these questions.

But the question we should really be asking ourselves is:

“What are the returns that I can earn for the longest period of time?”

“What is the training load or mileage that I can sustain for the longest period of time? And what actions must I take to ensure that I can sustain that mileage for years on end?”

A few years of 200% investing returns doesn’t matter if we’re levered up with risk to the point where we lose most or all of our investment in a bad year.

Training super hard and running a few crazy high mileage weeks won’t matter if we injure ourselves and have to stop running for several months (believe me, I learned the hard way).

What the best investors and the best runners have in common is they do the boring things consistently for years on end.

They don’t focus on maximizing the rate of output, but rather on minimizing the losses. Don’t lose money, don’t get hurt — and if you do, keep it small and learn from it so you don’t do it again. Stamp out anything that will prevent you from continuing to do the thing.

The returns in life

The most important returns in our lives come from the compounded effects of our investments over time — in our finances, relationships, hobbies, careers, and anything we want to improve.

Think about the relationships that matter most to us. Chances are, we’ve known those people for years and decades.

The returns of those relationships — depth, meaning, having someone we know we can go to for anything — came from showing up. The average Tuesday night dinner, helping them move, celebrating their major life moments, being there to listen when things are hard, just spending time together.

We’ve built years and years of “memory dividends” with the people we love most, and longer time horizons make these relationships more valuable.

Doing the boring things consistently for years on end.

I’m no expert on marriage, but I’d imagine it’s similar. Maybe in the movies people fall in love at first sight and live happily ever after. But in real life, the best marriages probably get stronger over time. They’re probably the result of compounded returns that come from both people continuing to show up and do the little things for decades.

When we observe a wealthy person, a fast runner, or the picture-perfect couple, we’re really just seeing the tip of the iceberg.

We might think those people did something special, that they had some secret strategy to their success.

They do: they just kept showing up and doing the little things to avoid anything that might stop them from continuing.

Einstein was right. Except the even more beautiful thing about compounding is that it’s incredibly simple.

We don’t get this:

Without this:

The best time to start that thing — planting a tree, investing money, starting running, committing to a relationship — was 10 years ago. The second best time to start is today.

With enough time and consistency, the sky’s the limit.

-Owen

Fresh Finds

Dr. Peter Attia: Improve Vitality, Emotional & Physical Health, & Lifespan (Huberman Lab)

Podcast | 210 minutes

This one is super long, but I enjoyed every second. You’ve probably heard of at least one of these guys, but both Huberman and Attia have grown popular in recent years for their podcasts on health & human performance. Attia recently launched a book on longevity — specifically focused on the quality of our years, rather than just how long we live. I’ve been listening to Attia for years, but the way he opens up on this episode near the end gives listeners a side of him that he rarely shows publicly. Definitely worth adding to your weekend queue.

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