“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 w∏hen one small event/occurrence 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

Every single day, chop wood, carry water

The One Percent Rule

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)

#Newsletter

Success is rarely the result of one variable, but failure often is.

In some areas of life, your reputation is defined by your wins.

1. Creative pursuits. One bestseller or hit song can erase the memory of the ones that didn’t work.
2. Entrepreneurship. People rarely remember your failed business ideas, only your winning ones.

In areas like these, your mistakes fade away and the breakthroughs last. But in other areas of life, your reputation is defined by your losses.

1. Crime. You can drive safely 364 days a year, but one DUI changes everything.
2. Ethics and morals. One unethical decision can ruin a reputation and destroy trust.

In areas like these, your mistakes linger and consistency is rewarded.

Some areas of life reward your best day. Others punish your worst day. Know which situation you’re in, and you can better decide when to be risky and when to play it safe.

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!!!

Bad things happen dramatically. Good things happen gradually, and don’t feel like “news”.

“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.” — James Clear

1. A good night’s sleep doesn’t guarantee a productive day, getting only two hours is enough to derail your entire day.
2. Eating healthy all week doesn’t guarantee perfect health, but one case of food poisoning can ruin days.
3. One great workout doesn’t make you fit, but one injury can halt your progress for weeks.
4. Following all the right habits doesn’t guarantee perfect health, but one infection or serious illness can derail your energy and routines.
5. Dozens of kind gestures don’t ensure harmony, but one careless comment can spark conflict.
6. Being organized most of the day doesn’t guarantee productivity, but one major distraction can throw off your whole schedule.
7. Reputation/Trust is built over years, but one serious lie can break it instantly.
8. A project can have many parts running smoothly, but one critical bottleneck can stall everything.
9. A computer can run smoothly for months, but one corrupted file can crash the entire system.
10. Saving steadily doesn’t guarantee wealth, but one large impulsive expense can set you back significantly.

Success comes from getting all pieces right. That’s why it’s so hard.

Creeping Normality

The gradual acceptance of negative change, because it happens in such small increments that you hardly notice it at all.

“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?

“A clever person solves a problem. A wise person avoids it.” — Albert Einstein

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.

如果飛機航向偏離目標 1 度，在飛行 60 海浬（約 111 公里）後，就會偏離原來的路徑 1 海浬（約 1.85 公里）。

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.”

“It is remarkable how much long-term advantage people like us have gotten by trying to be consistently not stupid, instead of trying to be very intelligent.” ^{2 3}

“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.” ⁴

「不要想著贏、要想不能輸。」— 電影《KANO》

不輸才是贏，少輸也是贏。