“Compounding is the 8th wonder of the world.” — Albert Einstein

Positive Compounding

leads to a Virtuous Cycle (惡性循環)

1 + 1 = 11

冰凍三尺，非一日之寒

The Butterfly/Ripple/Domino Effect: the cumulative effect produced when one event sets off a series of similar or related events, a form of chain reaction.

The Matthew Effect

The Cascade Effect

All the great outcomes in life come from compound interests, whether it’s in investing, or whether it’s in relationships.

Growth fuels more growth over time—the more you grow, the more feelings of growing.

The Power of Discontinuous Jump

A rolling snowball gathers more snow. ¹

Negative Compounding

“How did you go bankrupt? Two ways. Gradually, then suddenly.” — Ernest Hemingway

“Powerful avalanches begin with small shifts.” — Pamela McFarland Walsh

leads to a Vicious Cycle (良性循環)

10 - 1 = 0: 即使做對十件事，只要其中一件事做錯，一切就歸零，避免犯錯比什麼都重要!!!

“It isn’t the mountains ahead to climb that wear you out; it’s the pebble in your shoe.” — Muhammad Ali

• You can’t conquer the mountain in your path until you remove the pebble in your shoes.
• What truly exhausts us isn’t always the big, obvious obstacle — it’s the small, nagging issue we ignore/overlook.
• The real threat to progress often comes from within or from things we deem too minor to fix. It’s like trying to run a marathon while ignoring a blister.
• How it applies in life:
  • A student might fail not because the coursework is too hard, but because they keep doubting their intelligence.
  • A relationship might crumble not from a huge fight, but from years of minor miscommunications or unspoken resentment.
  • A project might stall not from lack of skill, but from procrastination or perfectionism.

How To Avoid Compound Mistake?

1. Create Space
2. Evaluate the New Situation
3. Execute & Act

Remember: Remain flexible and adaptable during this phase

The 1-in-60 Rule: Evaluate, Course-Correct, Repeat

A 1 degree error in heading will cause an airplane to miss its target by 1 mile for every 60 miles flown. Tiny deviations from the optimal course are amplified by distance and time. A small miss now creates a very large miss later.

The Boiling Frog Syndrome (溫水煮青蛙)

Premise: If a frog is suddenly put into a pot of boiling water, it will instinctively jump out to avoid being killed and save itself from impending death. But if a frog is placed in warm water that is slowly brought to a boil, it may not notice the creeping, subtle change in temperature until it is too late.

Life Analogy: The most dangerous habits, behaviors, and beliefs are the ones you slip into slowly, day after day, without ever realizing the damage they are doing to your life. We think that catastrophic outcomes can be avoided by simply avoiding significant mistakes, when in reality, catastrophic outcomes are often simply the macro result of thousands of micro mistakes. Minimizing stupidity will get you far in life.

James Clear

“Success is largely the failures you avoid. Health is the injuries you don’t sustain. Wealth is the purchases you don’t make. Happiness is the objects you don’t desire. Peace of mind is the arguments you don’t engage. Avoid the bad to protect the good.”

Charlie Munger

“All I want to know is where I’m going to die, so I’ll never go there.”

“I just try to avoid being stupid. I have a way of handling a lot of problems—I put them in what I call my ‘too hard pile,’ and just leave them there. I’m not trying to succeed in my too hard pile.” ²

See Also

• Every single day, chop wood, carry water