How to Use The Surprising Power of Compound Interest in Life

The Power of Compound Interest In Life - By SUMIT GUPTA

The Power of Compound Interest In Life – By SUMIT GUPTA

When I was young my mother used to wake me up 5 minutes earlier than I had told her to, and made me study any of my school books before getting ready to go to school. I often used to ask her – “how would studying this for just 5 minutes make any difference?” And she would say – “You will know that by the end of the year.” It took me a few years to realise how much my good grades were determined by those 5 minutes of study time daily.

We all know the power of compound interest when it comes to money. This article will focus on how we all can use the same principle of compound interest in other areas of our life to get enormous gains. Only if we realize, that is.

Doing something small, which might look very trivial and futile, and doing it regularly without fail – no matter what it is, will take your skills in that area to a totally different level over time. This habit has stayed with me ever since my childhood, and I have used to learn several new skills. Below are a few examples we can make our lives better in just 5 minutes –

“Compound interest is the eighth wonder of the world. He who understands it, earns it ... he who doesn't ... pays it.” ― Albert Einstein

“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
― Albert Einstein

  1. Just spend 5 minutes reading a book every day, and by the end of the year, you will have finished many books and you will have many new skills and learnings. I still carry this habit which my mother imbibed in me so many years ago.
  2. Spend 5 minutes exercising every day, and you will be amazed at how much strength and energy you have after a few months.
  3. Getting up Early – If you get up at 8 am and want to move to a 5 am routine, start with just a 5 minute early start. Get up at 7:55 am for a week, and then get up at 7:50 am the next week. In around 9 months, you will be waking up at 5 am without even noticing it.
  4. Write – If you always want to write something but never had the time to do so, just write the topic and title of what you want to write about today. Tomorrow, just write a few bullet points. Over the next few days – take each point and expand it to a paragraph. Within a week, you will have a full page post ready.
  5. Photography – I was always interested in making better photos and photography, but never used to get the time to do so. After 4 years of buying my DSLR, I finally decided to give 5 minutes to photography daily – whether it is shooting any subject I could find at my home or outside, or reading an article or watching a video about it. Within a couple of years, my photography skills had improved so much that I now take it very seriously and might even do it professionally at some point in the future.

So think about the things which are not working in your life and career right now, or stuff for which you don’t have time. Now, start doing just 5 minutes of it daily, and stick to it.

Things to Take Care
While it is easy to do something for just 5 minutes a day, it is also very easy to forget doing your 5 minute task. There are a few things we can do to keep at this habit –
1. Set a reminder in your phone. Once the alarm goes off, make it a priority to do your 5 minute task.
2. Watch yourself get better in that skill over time. Celebrate for 5 minutes every now and then, for sticking to the habit and for the getting better.

Five Things A Leader Must Do By Default

In today’s corporate environment, after a few years of doing your job well enough, chances are that you will be asked to step up and lead a team. You trained and studied to be good at your job, and now getting to manage people seems like a reward for a job well done.

By promoting the good performers to be managers and leaders, people have assumed for centuries that the skills that made you successful as an individual contributor would also make you successful as a manager. If you have led people for any considerable amount of time, you would know how false this assumption is. Yet in the business world, this continues to be the norm.

Today I want to list down five things which you must do, or are expected to do by default, to be effective as a manager/leader. And it is likely that nobody told you this when you were promoted. I have only figured them out after leading teams for over a decade, and I believe I am on a continuous journey to learn and know more about leadership.

1. Lead Yourself
The first thing you must do to be effective as a leader is to lead yourself. Your relationship with your team will be determined more by your trustworthiness than by any other skill or talent you might possess. Trust is the foundation of leadership, and you build trust by leading yourself first – by holding yourself accountable for what you demand from your team. Like any worthwhile endeavour, it takes time, effort and daily investments to build trust with your team.

If you want your team members to honour their promises, honour your promises to them. If you ask them to be on time for meetings, you must be on time first. Or you will lose their trust. If you ask them to be respectful to each other, you must respect them first. Or you will lose their trust. If you want them to be humble, you need to exemplify that in your behaviour. If you need them to be honest and sincere, you need to acknowledge your mistakes publicly and make amends for them. You can not lead a team if you can’t lead yourself.

“Trust takes years to build, seconds to break, and forever to repair.” - Unknown

2. Know Where You are Headed

When you are leading a team, people will look up to you for providing direction. Having a well-defined purpose clarifies why the team exists in the first place. Coming up with the team’s purpose together with your team will empower them to take decisions which are in the best interest of the team.

Listening to your team and engaging in a dialogue will allow the team to define and own its purpose. You need to spend time with the team regularly to discuss, revisit or reshape the team’s purpose. Ensuring each member understands the team’s purpose and their role in the team will empower them to prioritise their tasks effectively.

3. Be a Coach
If you have people reporting to you, then you are their coach by default. You don’t have a choice in being their coach as people will approach you anyways. When they are demotivated, when they have a conflict, or when they need help for any other reason; it is your responsibility to listen, understand their concerns, and then coach them to align their personal motivations with the team’s shared purpose and goals. If you can’t do that effectively, it will impact the results the team intends to produce in the future.

While I assert that you are a coach by default, the skills and conversations required to be a coach don’t come by default. You must invest time and effort in learning and practicing your coaching skills. How well you coach people will be directly proportional to the results the team produces. Investing in learning these skills and making coaching a priority will be your best investment ever.

“If you don’t know where you’re going, any road will take you there” – Lewis Carroll

4. Demand Commitment and Accountability
Just as every sport has a certain set of rules, each business team can come up with rules (or standards) which apply to their business and industry. These rules will govern how you work and define success and failure. Examples could be how you treat your colleagues, how complaints are handled, and what boundaries you set in matters important to the team. Once these standards are set, it frees up everyone to exercise their own creativity in making decisions. This gives shape to the ‘culture’ in the team.

After you set up these standards together with your team, you have to demand them. Of course, for this to work, you have to exemplify them yourself. Holding your team accountable to these standards (or rules) will bring the team members together and set the team up for high performance. The intention behind it is not to punish or penalise people when they slip up, but to ensure an open, fair and supportive culture in the team.

5. Serve Your People
I believe that leadership is a privilege, and that each leader is a custodian of the company’s values, beliefs and ambitions for the future. Leadership will require you to think beyond your own self-interest, and from your team or company’s point of view. In order to lead you must be willing to serve – to put your team’s interest in front of any individual interests, which might lead you to make some difficult decisions from time to time.

Leadership is not about power or authority, nor is it about popularity. Leadership is about character – which you will need to express yourself authentically, compassion – which you will need to grow and develop your people, and integrity – which you will need to serve your people with the respect and transparency they deserve.

I believe that leadership is standing for something bigger than yourselves. You show your team the way, give it what it needs to do the job, and then get out of the way. Your biggest job is to create an environment of respect and accountability, where people have fun and express themselves freely by continuously moving forward towards the team’s goals.

Leadership is Service

To sum it up, these five points above are not strategies or tactics which you can incorporate in your leadership style to get better results. These are the bedrock which will give rise to a myriad of strategies and tactics, which in turn will lead to those results. If you try to fake them, your people will call your bluff sooner or later, and you will lose all credibility and trust. An attitude of humble service will enable you to become a better leader, while taking care of your team and company’s needs.

How our Listening Filters Create our Reality and Limit Us

One of my most vivid memories from my childhood is when my grandmother mistook me for my father. I first thought she had gone crazy, but I was relieved when it was diagnosed as cataract in her eyes. Within a few days and after a small surgery, I was back to being her grandson. That was an easy fix — I thought at that time.

I had no idea that many years later, I was to discover a kind of cataract — in my vision and listening. The cataract which I am talking about are our listening filters. As I shared briefly in my article about Listening, these filters helps each one of us create our own perceived reality which helps us in making every decision — big or small — of our lives. However, unless we know the various listening filters at play, we don’t see our reality as a perception but as the absolute truth.

Whenever we see or hear something, we select what to pay attention and what to ignore, often subconsciously, based on a certain set of filters. A simple example could be someone speaking our name. Even if we are in a crowded room, we will instantaneously pay attention if someone utters our name, even if they are behind or far away from us. Our filters make us give more attention to our name than any other word.

Similarly, other listening filters make us pay more attention to certain things and ignore others. They can make one of us cry and another laugh on hearing the same story. They allow us to make sense of the situation in front of us, which creates the foundation on which we base our decisions.

listening filters color our world

What color does your world look like?

What are these Listening Filters?

1. Parents
Our parents are our first contact with humanity. As we grow up, our parents influence us the most. As we try to understand the world around us, our parents tell us stories to make it easier for us to navigate it. Everything that we consider as our most basic self – our religion, language, values, our political affiliations — are shaped by our parents more than anyone else.

Subconsciously we learn to listen to the outside world through them. Depending on what our parents think, and how they act, we learn to make our own choices, and judge other’s choices. We either end up see the world as they do, or rebelling against them and view the world contrary to how they see it.

2. Values and Beliefs
We filter everything we see and listen through our values (how we define right & wrong), and political, religious and other strong beliefs. For example – If a person has suffered racial discrimination in the past, he is likely to filter all future interactions with suspicion and caution.

If we hear what is in tune with our values and beliefs, we feel relaxed, joyful, and get an ego boost which can easily be seen in our body language. When we hear or see something contrary to our beliefs, we are surprised and might even feel pain and shock. We feel our muscles tightening, which can develop into stress, frustration and anger. Again, this is visible in our body language.

3. Culture – Language, Society, Religion
We behave in the world according to the religion we follow (or not), the languages we speak and are spoken around us, and the norms of the society we live in. Whether we are direct or vague in our communication, whether we are disciplined in our daily dealings or not, whether it is polite to accept a gift or not, and other subtle things in our daily life — are shaped by the culture of the land we live in.

4. Intentions, Expectations and Mood
We enter every conversation with an expectation of the outcome. For example – my expectations are very different when I talk to my colleague at work compared to when I run into him over the weekend. Similarly, my expectations differ when my wife calls me up at our usual time and when she calls up unexpectedly during the middle of the day. What we listen in these different circumstances is shaped by what we expect to happen.

Our listening is also shaped (or filtered) by our mood. At the end of a long day when we are tired, if we don’t get our expected response in a meeting, we might easily get frustrated and angry. But if we get the same response at the beginning of a day when we are fresh and energetic, we might respond in a totally different manner. The difference in both these cases is our mood impacting our listening.

5. Personal Prejudices
We all have certain personal prejudices, which can be racial, economical or something even more subtle – like the way one dresses. We listen and treat people differently based on these prejudices, most often on a subconscious level. An example is considering one colleague more ambitious than another based on how they are dressed. Another example is how we listen when we are approached by a homeless person on a street. Do we trust them when they approach us for money, or think about whether they are just going to use the money to get drunk?

We all have such personal prejudices formed over the years which live in our subconscious and give us a filtered view of the world around us. We are likely to ignore anything that opposes these prejudices, and very likely to agree and bond with anyone who shares the same prejudice as us. For instance, if we have a personal dislike for a person, we are likely to be dismissive about his ideas. On the contrary, when we interact with people we admire, we might behave over-optimistically in situations which warrant more caution.

We Don’t See Things As They Are, We See Them As We Are

We Don’t See Things As They Are, We See Them As We Are

Does everyone have the same filters?
Absolutely not. Just like our fingerprints, each one of us has unique listening filters. Based on our past, we all filter how we experience the present and make meaning of what we see and hear. Furthermore, our listening filters are changing (or evolving) daily based on new people we meet, successes and failures we have, and prejudices we form.

Our listening filters give each one of us a unique view of the world around us. These filters are almost like glasses through which we view the world. We put on our black glasses, and then complain the world around us is black. Not only that, we argue and fight with others wearing red glasses that the world is black and not red. Sounds silly, isn’t it! Yet we all do it.

What can we do about them?
Every decision we make, whether it is trivial or a life changing one, depends on how we assess the situation. Our listening filters help us create this assessment, which in turn limits the options in front of us. If two people act differently in the same situation, the difference is in their assessment of it. Reality is the shaky foundation on which we all rest our decisions.

As you read this article, and understand it through your own filters, don’t be led to believe that there is something wrong with having them. Instead, they are very useful in giving us a set of options in each situation which help us navigate through life. However, we are normally blind to the fact that these filters give us our perspective of life in each moment. If more aware, we are likely to understand how others see things differently.

Knowing that others may see the same situation differently can help us stay humble in challenging times. Being aware that our listening filters limit our available options can give us a big picture view and bring a smile on our face in stressful situations. In doing so, we don’t have to throw away our coloured glasses through which we view the world, we just have to be aware of them. And perhaps, try different ones for a while.

Making an attempt to sincerely view a situation from the other person’s point of view is what Real Listening is all about. If we can do so, we will make our conversations a bit more constructive, our days a bit more fun, and our relationships a bit more meaningful.

How to Listen Well and the Massive Difference It Can Make

Listening is one of the most basic skills required in human communication. Then isn’t it strange that there is no formal training on how to listen in our school and professional system? The lack of emphasis on listening could be because we believe that listening comes naturally to us as human beings. But from what I have learned in life, listening is not a natural skill and it takes conscious effort to listen well. Below are my biggest learnings on how to listen well :-

1. Why Do We Listen?

The first, and the most obvious, question to ask when we are listening is “Why?” Are we listening because then we get our chance to speak up? Are we listening because we have an agenda in the conversation and are thinking about how can we achieve that? Or are we listening because we just want to be polite, and otherwise we couldn’t care less about what the other person is saying? More often than not, we listen because of one of the above reasons. And it is not because we are selfish or deliberately trying to be rude, but because this is our normal way of operating in most conversations in life. Speaking up and making others agree to what we have to say gives immense pleasure to all of us, and in most conversations we unconsciously try to achieve that.
I claim that the only objective of listening, whether it is your spouse, friend or a business colleague at the other end, is to get what the other person is communicating. Not what the other person is ‘saying’ but what he is ‘communicating‘. And this requires conscious effort and continuous training in the act of listening because it is very natural to fall back into the default mode of listening.

2. What Do You Listen For?

Listening effectively is much more than hearing the sound and words coming out of the other person’s mouth. True listening happens when you ‘get’ the other person’s world – i.e., when you empathically see and feel about the situation just as the other person does. It is about getting the emotions – of joy, anger, frustration, resentment, etc – which are often hidden beneath the words actually being said.
Can you feel the other person’s pain, fear, excitement or happiness? True listening is about standing in the other person’s shoes and seeing the world from his point of view, and it takes a lot of effort to do this well. It is as much about hearing what is not being said as it is about what is being said. True listening requires patience to wait it out and the courage to go beyond our personal prejudices and see something from the other’s point of view.

3. How Do You Listen?

So the next question is – how do you do that? Based on my experience, here are some guidelines which can help anyone to listen well :-
  1. Shut Up. Don’t interrupt the other person. Ever. Remember, you are supposed to be listening.
  2. Be attentive, alert and interested. Remove any distractions like mobile phones from the scene. Let the other person know that he has your full attention through nonverbal behaviour.
  3. Use filler words like “uhh”, “hmm” and body language to acknowledge what he is saying. Invite and encourage the other person to say more by saying “tell me more about it”, or “I am listening”.
  4. Be ok with silence. This often gives the other person time to gather his thoughts and speak up again.
  5. Listen for the emotions behind what is being said and sincerely attempt to step in the other person’s shoes and feel the same emotions yourself.
  6. Hold any judgement or advice if it comes up in your head. Do not try to comfort the speaker by saying words like “It is not that bad” or “Give it some time”. Don’t get angry or respond in any way. Just listen. And feel.

4. Who Decides if You “Got it” or Not?

The above guidelines are not a guaranteed way to listen to someone, and don’t assume you have listened well because you think so. The speaker is the only person who get to decide whether you “got” it or not. After the speaker has finished saying whatever he had to say, sum up whatever was said and how he feels. You don’t have to agree or disagree with the speaker at this point, you only need to paraphrase what you have understood and ask the speaker for validation. When the speaker says that you “got” it, make sure he is not just saying that to be nice or to avoid an uncomfortable environment. Only then can you be sure that you have listened to what was communicated. If the speaker says that you didn’t get it, ask him to explain more and repeat the process.

5. Listening Creates our Perceived Reality

When we listen to someone, we create our own perceived reality. This perception is unique to each person, and if 10 people were to listen to the same thing, you would agree that it is possible that they can create their own interpretations and perceive the reality in 10 different ways. How we listen is determined by a certain set of filters like our culture, habits, values, beliefs, intentions and expectations. Most often we unconsciously pay attention to certain things and omit certain others from our listening based on these filters. It is these filters, and the reality they create for us that help us make our each and every decision in life.
Realise that each one of us have our own set of listening filters which creates our own reality which is neither any truer or falser than anyone else’s. This is a big first step to work with people who see the world differently from us. True listening often requires the patience and courage to see and acknowledge how the speaker has perceived his reality. It requires the compassion to understand another’s reality, especially when it is different from our own.

6. Listening Creates Connections

When done well, listening creates deep understanding which leads to trust and respect among both parties, even if you were to disagree with the subject at hand. It enables the speaker to release his emotions and feel at ease, often even helping him to crystallise his own thoughts in the process. It reduces stress and helps to ease the situation which creates a foundation – a safe environment in which there are opportunities for collaboration and problem solving. True listening leaves both the parties with a stronger bond than when they started.
Another way to look at listening is like an investment. If you spend 30 minutes truly listening to someone, it can create a connection which will make your relationship stronger. A strong bond with someone can help you avoid stressful situations and make decisions quicker in the future. Since this kind of listening is so rare in our ever distracted world of gadgets and notifications, it is all the more significant when it happens. To know that someone listened and understood what you said is a remarkable gift, and you should not miss a chance to gift it to others.
What I have described above is not easy, and it is very tempting to hit back with your own accusations when someone is angry or frustrated with us. But it (listening) is a skill which can be mastered over time. Most of our time spent in communication involves listening, and hence I can’t stress enough on its importance. I also believe that the ability to see a situation from another’s point of view and to shift perspective is one of our most important abilities as human beings, and one which can help us solve many of the problems we face today.

How to Powerfully Step into the New Year 2017

I think it was 1989 when I, for the first time, realised that the 1st of January was a special day. The biggest change for me, one that always took a few weeks to get used to, was to write 1990 instead of 1989 in our school notebooks daily. While the whole world celebrated and wished each other on the 1st of Jan, nothing much else seemed to have changed (for me). Today, as we stand at the cusp of 2017, 28 years have passed since then. Though the fact still remains that nothing much changes between Dec 31 and 1 Jan, if we look at the last 28 years, then we can no doubt say that the whole world and each of our individual lives have changed immensely. While we may not always notice and acknowledge it, change is the only constant in life. A New Year is our annual reminder that time has come to move on and prepare ourselves for the changes coming.

Today I want to ponder and write about how to powerfully step into the new year, so that we are not surprised or shocked by the changes it will bring along. Over the years I have realised that we might very well let the years slide by without much attention; there always comes a time when we are made aware, not often subtly, that time has moved on. So read on if you prefer to enter the new year on your own terms, or skip this article if you feel a new year is too insignificant an event to trouble your brain cells.

1. Complete 2016
The first step before starting anything new is to finish what you are doing now. Just like we put the first foot down before lifting the other one while jogging, just like we get our raw vegetables and spices ready before cooking our food, it is imperative that we finish our 2016 before we even start thinking about 2017. If we ignore this first step, the result will be the same when we start cooking a delicious dish only to realise later we never got the required ingredients.

What I mean by completing 2016 is taking some dedicated time before the new year to –
1. Introspect your goals (if any) at the start of the year and make peace with where you are now.
2. Celebrate your achievements (big and small) and laugh about your failures (missed opportunities)
3. Reflect upon what you have learned, and how you have changed or grown over the year.
4. Free your mind from the grip of the difficult people and hard situations you have encountered this year.
5. Apologize if you realise you have been a difficult person in someone else’s life.
6. Give up any blame, regret or shame gathered this year. There will be new to collect in 2017 🙂
7. Thank and express gratitude to everyone who has made a difference in your life.

2. Know Yourself
The next step before moving ahead is to take some time to know yourself better. That doesn’t mean finding out your blood group or body weight or exam grades or other people’s predictions about your future, but rather looking deep inside yourself to discover your deepest values and motivations. You can do so by answering questions such as –
1. What are your deepest motivations? What have you always wanted to do?
2. What are you really passionate about? Is there something worth devoting your life for?
3. What drives your actions and decisions? What are the values you hold most dearly?
4. What makes your really happy or angry?
5. Who are your biggest inspirations in life, and who are the people you can’t stand? Why?

Answering these questions are anything but simple and there can never be final answers to them. But if we take time and ponder over them and come up with some ideas, we will know ourselves better than anybody else (our parents, friends, grades, achievements, money) can tell us about.

3. Where do you want to be in the next 5 or 10 years?
The next step is to think about the future and exercise your imagination muscles. Think about the kind of person you want to be in the next 3, 5 or 10 years. This might seem like too far ahead in the future, but it doesn’t take long for these years to roll by. Just think about how quickly the last 10 years have passed by. Imagining your own future can feel a bit strange and uncomfortable at first, but soon it will become a lot of fun – just like a game. Do not let this question overwhelm you (which it can), and instead, play it like a game and see what you come up with.

While you imagine your future, think about your deepest desires and ambitions. What do you want to accomplish that will give you the most satisfaction? What changes you want to see in yourself, your family, your society, your company, your city and your country? How do you want people to relate to you after 10 years? In this step you do not need concrete answers, but a vague image of where you want to be. The intention of this exercise is to get you thinking about your future, the actual answers you come up with are not so relevant.

4. Decide milestones or checkpoints on the way
The next step is to identify milestones for the next 1 year for the ambitions which you discovered in the previous step. Don’t let this step scare you. You don’t have to decide milestones for each one of your ambitions – you can choose a few which are the most important to you. Also don’t worry or bother about “how” you will reach your milestones as you have the whole year to think about that.

These milestones will serve as checkpoints which will measure your progress towards your long term ambitions. These milestones can be broken down into quarterly and monthly milestones depending on what you prefer. The only thing to take care while marking these milestones is to make sure they can be observed and measured by anyone easily and they are not vague. Make sure to be clear about what you want to achieve, when and where you will achieve that and with whom. The more numbers you can use the better this step will be in its fruitfulness, and it is best to avoid vague words like soon, sometime, in a few weeks, improvement, better, more, etc.

In the above two steps, it is very important to also include and keep time for recreation, fun, sports and other forms of entertainment. The whole idea of this exercise is be more aware about yourself and prepared for the coming year, and it is very important to not take it too seriously and think only about work and professional stuff. If you are a movie buff and want to watch 100 movies or visit a few movie festivals next year, plan your milestones for it.

Where are you going?

Where are you going?

With the above four steps, you can step into the new year and make a powerful “start“. Of course, that doesn’t mean that your life will pan out exactly as you imagined or that the next year is going to be your best year. It just doesn’t work that way. But knowing where you want to go is always better than hoping to get “somewhere”.

I can write another article about what you can do in the new year to make sure you hit your milestones, but we must always remember that change is the only constant in life, and it can come up in unexpected ways and mess up our plans anytime. But having messed up plans is still better than having no plans at all, and we can repeat the above process anytime to plan afresh for the future – we need not wait for the next “New Year” to repeat this process.